Final Deadline for 401(k) Fee Disclosures: August 30, 2012February 20, 2012, 02:11 PM
The Department of Labor has postponed the date that 401(k) plan sponsors must comply with new fee disclosure rules from May 31, 2012 to August 30, 2012. These rules, introduced in final regulations under the Employee Retirement Income Security Act (ERISA) Section 408(b)(2), require sponsors of participant-directed account plans such as 401(k) plans to provide detailed information about the plans procedures for making investment directions as well as a breakdown of the fees charged by each available investment fund. The postponement was granted by the Department of Labor in order to allow plan sponsors some additional time to adjust to recent revisions to the final regulations. The benefits community had been anticipating that the effective date of the regulations would be postponed, but most commentators had hoped for an extension into the 2013 calendar year. The three-month delay granted by the Department of Labor leaves little time for plan sponsors to finalize their disclosure materials to comply with the new fee disclosure requirements. Within the next few months, plan sponsors should receive detailed fee disclosure information from the plans investment providers. This information must be compiled into two separate disclosure statements that are required to be provided to participants on an ongoing basis: an annual disclosure (which must be provided by August 30, 2012), and a quarterly disclosure (the first installment of which must be provided by November 14, 2012). Stay tuned for further updates, including a more detailed discussion of the required contents of the new disclosure forms.