The U.S. Department of Labor on July 22 announced temporary relief for retirement plan administrators from some participant fee disclosure deadlines approaching in August. In Field Assistance Bulletin 2013-02, DOL said it would allow a one-time “reset” of the requirement that administrators “at least annually” provide to participants detailed comparative charts of plan investment options.
In the 2010 regulations that established defined contribution plan fee disclosure rules, administrators of calendar-year plans were required to provide these comparative charts for participants by Aug. 30, 2012, then to furnish them again at least once a year afterward. The regulation’s “at least annually thereafter” wording was defined as at least once in any 12-month period, regardless of whether the plan operates on a calendar or fiscal year. (About 80 percent of U.S. retirement plans operate on a calendar year, according to U.S. Treasury statistics. DOL estimates fee disclosure reports are now sent to 72 million plan participants.)
So if an administrator provided the comparative chart as of August 2012, it had to again provide an updated chart by the same day in August 2013. This timing created problems for those with calendar plan years because the comparative charts could not be combined with other disclosure reporting the plan prepared for participants closer to the end of the plan year. DOL said some administrators expressed concerns about increased costs and participant confusion resulting from separately generated comparative charts.
The August deadline came about because the first comparative chart was to be provided no more than 60 days after the July 1, 2012, effective date of the Section 408(b)(2) regulation that put in place the rules for participant fee and investment-related disclosure.
In response to these industry concerns, DOL issued the FAB to give more flexibility to administrators by allowing them once to realign or “reset” the comparative chart’s annual deadline with other plan disclosure documents and notices being prepared. In other words, if a plan administrator finds it would benefit participants and beneficiaries, DOL said, it can issue the 2013 comparative chart no later than 18 months after the first comparative chart was provided in 2012. The FAB allows administrators who already provided a 2013 comparative chart to furnish the 2014 chart using the same reset rule that is available for the 2013 chart.
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