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DOL Issues Important Relief for Annual Participant Fee Disclosures Due in 2013

Aug 01, 2013

By Stephanie L. Hicks

The Department of Labor ("DOL") recently announced that it will allow plan administrators of participant-directed individual account plans to reset the timing of the annual distribution of the investment comparative chart that they are required to furnish to plan participants. Under the guidance, a plan administrator may furnish the annual investment comparative chart that is due for 2013 within 18 months after the 2012 comparative chart was furnished.

Background of Participant Fee Disclosures

In 2010, the DOL issued a final regulation on disclosure requirements for participant-directed individual account plans.  If the plan allows participants to direct the investment of their plan accounts, the plan administrator has an obligation to give participants sufficient information about the plan's investment alternatives to make informed decisions regarding the investment of their plan accounts.  Plan administrators of calendar year plans had to furnish a comparative chart of the plan's investment alternatives for the first time no later than August 30, 2012, and subsequently "at least annually thereafter".

Field Assistance Bulletin 2013-02

The DOL issued Field Assistance Bulletin ("FAB") 2013-02 in response to the concern expressed by plan administrators and service providers regarding the timing of the "at least annually thereafter" requirement.  Specifically, they wanted the flexibility to furnish the comparative chart at the end of the plan year.  In recognition of these concerns, the DOL will allow a one-time "reset" of the timing of the distribution of the annual comparative chart.  A plan administrator may furnish the comparative chart due for 2013 within 18 months after the 2012 comparative chart was furnished.  For example, if a plan administrator furnished the first comparative chart on August 25, 2012, the 2013 comparative chart would have been due no later than August 25, 2013.  However, in accordance with FAB 2013-02, the DOL will take no enforcement action on timeliness if the plan administrator furnishes the 2013 comparative chart by February 25, 2014.

A copy of FAB 2013-02 can be found at http://www.dol.gov/ebsa/regs/fab2013-2.html

If you have any questions about the participant fee disclosure rules, please contact Ed Hammond at (248) 988-1821 or ehammond@clarkhill.com ; Kristi Gauthier at (248) 988-5854, or kgauthier@clarkhill.com ; or Stephanie Hicks at (248) 988-5893 or shicks@clarkhill.com or one of your Clark Hill or Clark Hill Thorp Reed labor and employment lawyers.