The Plan Sponsor Council of America, ERISA Industry Committee and U.S. Chamber of Commerce have asked the Department of Labor to clarify some of its proposals relating to fee disclosures in participant-directed individual account plans.
In particular, the groups asked the DOL to confirm that the extension given to plan administrators to furnish a comparative chart of alternative investments also applies to other disclosures they are supposed to submit to plan participants annually.
In a letter to the DOL, the groups also asked the agency to confirm that plan administrators that delay the annual fee disclosures in accordance with the Field Assistance Bulletin continue to be entitled to rely on the fiduciary safe harbor included in the regulation; extend the deadline for annual fee disclosures by providing a 45-day window as suggested by the department; and provide additional relief for special plan events.
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In October 2010, the Employee Benefits Security Administration published a final regulation on disclosure requirements for participant-directed individual account plans. It required plan administrators to disclose detailed investment-related information to plan participants and beneficiaries about the plans' designated investment alternatives.
Plans operating on a calendar-year basis had to furnish a comparative chart of the investment alternatives for the first time by Aug. 30, 2012, and annually after that. The timing requirement was designed to ensure that participants and beneficiaries received consistent and regular information about their plan's investment alternatives.
Some plan administrators and service providers expressed concern in recent months about the timing requirement, specifically that the Aug. 30 deadline has no correlation to the timing of any other annual participant disclosures.
The EBSA attempted to solve this issue in its Field Assistance Bulletin 2013-02 by giving companies 18 months after their initial disclosure, instead of 12 months, to provide participants with a comparative chart, allowing them to essentially reset the clock on when their disclosures need to be provided.
The letter stressed that the fiduciary safe harbor should be extended to match the one-time extended window of time given to plan administrators to furnish participants with plan disclosures.
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