Plan Fee Disclosures Extension Coming Soon

In our November e-news article “New Pension Plan Fee and General Disclosure Requirements”, we told you about new participant-level disclosures mandated by the Department of Labor (DOL) that, will be effective for plan years beginning on or after November 1, 2011. These disclosures will have to be provided to participants on or before the date on which a participant or beneficiary can first direct his or her investment. When the ruling first came out, this meant that plans initially had no more than 60 days to provide the required initial disclosures to participants who were already directing the investment of their individual accounts.

To some reprieve, the DOL just proposed to extend the transition rule from 60 days to 120 days. In the case of a calendar year plan, the 120 day transition rule would mean that the plan would have to furnish the initial disclosures no later than April 30, 2012. The additional required disclosures, including quarterly statement of fees/expenses actually deducted, will have to be furnished no later than May 15, 2012. Plans must have the proper reporting mechanisms to make sure initial disclosures are provided to all participants and beneficiaries who have the right to direct their investments, not just to those individuals who had the right to direct their investments, when this rule becomes effective.

If you have any questions regarding participant or plan-related information, please feel free to contact our 401(k) and Benefits Plan Professional, Mary Eileen Vitale at vitale@hwco.com.