The SPARK Institute has asked the U.S. Department of Labor for additional wiggle room when it comes to participant fee disclosure notifications.
Companies that sponsor retirement plans for their employees are required to notify participants about the fees they are paying in their participant-directed plans on an annual basis. Some in the industry have questioned the timing on those disclosures, which was the end of August, saying that timeline didn’t give employers enough time to get all of their regulatory ducks in a row.
In response, the Department of Labor last year issued a compliance bulletin giving employers 18 months to get their next fee disclosure notification out to participants.
The SPARK Institute and other industry participants would like to see that flexibility amended into the original disclosure regulation, allowing companies to file their fee disclosure paperwork within 45 days of the date they disclosed that information the prior year.
“Service providers strive to furnish disclosures to participants as soon as practicable after they have the information they need. However, the early delivery of materials in one year can accelerate the compliance deadline for subsequent years because of the manner in which the current definition of ‘at least annually’ appears to operate,” the organization said.
By giving plan sponsors an additional 45 days, it will allow them and service providers the additional time and flexibility they need to furnish required materials “without accelerating the deadline for subsequent years, and also avoid potential situations of non-compliance,” the letter stated.
The SPARK Institute represents the interests of a broad-based cross section of retirement plan service providers and investment managers, including banks, mutual fund companies, insurance companies, third party administrators, trade clearing firms and benefits consultants.