Tag Archives: retirement plan fee disclosures

Final Extensions Provided for Retirement Plan Fee Disclosures and PPACA Summary of Benefits Coverage

On February 2, 2012, the U.S. Department of Labor (“DOL”) issued final regulations under Section 408(b)(2) of ERISA.  As a result, there is a new due date of July 1, 2012 by which certain service providers must make compensation disclosures to responsible plan fiduciaries of defined benefit and defined contribution plans (such as pension and 401(k) plans).  This provides an extension of the April 1, 2012 due date issued under prior guidance.  The regulations set forth the types of information that must be disclosed so that the plan fiduciaries can assess the reasonableness of the compensation paid for necessary services and identify potential conflicts of interest in order to avoid a prohibited transaction with respect to the arrangement (and penalties which would result).   Plan fiduciaries should be in contact with their service providers to obtain these disclosures as soon as possible.  Time will be needed to analyze the information received, and to ensure that existing contracts/arrangements are reasonable. Disclosures are also required reasonably in advance of the dates contracts/arrangements are entered into, renewed or extended.  This extension also further extends the due date for the participant-level disclosures that plan fiduciaries of participant-directed individual account plans such as the 401(k) plan are required to make to participants under Section 404(a) of ERISA so that the participants have the information they need to sufficiently manage their individual accounts.  The new due date for these disclosures is no later than August 30, 2012 (which was May 31, 2012 under prior guidance) and the issuance of the first quarterly participant statements to include required information is now November 14, 2012.

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Department of Labor’s EBSA Provides Extension to Applicability Dates for Retirement Plan Fee Disclosures

On July 13, 2011, the U.S. Department of Labor’s Employee Benefits Security Administration issued a final regulation under ERISA to extend and align the applicability dates for retirement plan fee disclosure rules (i.e., the service provider fee and conflicts of interest disclosures to plan fiduciaries as well as the participant-level fee disclosures).  The service provider disclosures may now be provided no later than April 1, 2012 (an extension from January 1, 2012 as indicated in prior guidance).  There may also be additional guidance before the end of this year as to what those disclosures must include but the Department of Labor has indicated that any changes to last year’s interim final regulations pertaining to these disclosures should not require additional compliance time or another extension.  In addition, the new guidance provides that the initial participant-level fee disclosures can be provided after the effective date of the service provider disclosures (no later than May 31, 2012 for a calendar year plan).  This provides an extra month to comply with these rules.  Further, the initial quarterly statements can now be provided by August 14, 2012 (an extension of three months from the last issued guidance).  These extensions will hopefully afford plan sponsors and administrators the requisite additional time for compliance with and coordination of responsibilities with respect to these two requirements. 

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