For Immediate Release
Washington, DC – The ERISA Industry Committee (ERIC), along with the Plan Sponsor Council of America (PSCA), and the U.S. Chamber of Commerce (the Chamber) today urged the Department of Labor (DOL) to clarify its previous guidance providing relief with respect to the fee disclosure requirements for participant-directed individual account plans (such as 401(k) plans).
The DOL on July 22 released Field Assistance Bulletin 2013-02 (FAB) allowing 401(k)-type plans to reset the timing for the annual fee disclosures plan sponsors are required to furnish to plan participants. The FAB states that the DOL, as an enforcement matter, will treat plan administrators as satisfying the “at least annually thereafter” requirement of the participant fee disclosure regulation if they furnish the comparative chart no later than 18 months after the prior comparative chart was furnished.
While the body of the FAB references the “comparative chart,” the group believes the FAB provides a one-time extension for all of the regulation’s annual disclosures and not just the comparative chart. ERIC, PSCA, and the Chamber’s letter asks the DOL to confirm that the guidance applies to all of the requirements under the regulations.
“We believe the Labor Department intended in its original announcement for the relief to apply to all of the annual participant fee disclosures, but it would be very helpful if the Department clarified this. Allowing plans to coincide these required annual disclosures with other year-end disclosure requirements is a common-sense approach that would minimize confusion and costs among plan administrators and participants,” said Kathryn Ricard, ERIC’s Senior Vice President for Retirement Policy.
Additionally, the fee disclosure regulation provides a safe harbor that plan administrators can use to satisfy the requirements of the Employee Retirement Income Security Act of 1974 (ERISA) for participants who can direct the investment of their accounts. ERIC, PSCA, and the Chamber also request that the DOL issue guidance to confirm that plan administrators who delay the annual fee disclosures can still rely on the fiduciary safe harbor under the regulation.
The letter can be accessed by clicking on the link below.