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Filed Under:Life Insurance, Life Planning Strategies

401(k) Fee Disclosure Rules Clarified, Deadline Delayed

U.S. Secratary of Labor Hilda Solis (AP Photo/Al Behrman)
U.S. Secratary of Labor Hilda Solis (AP Photo/Al Behrman)

Plan sponsors will now have until July 1 to meet the much-discussed regulations on 401(k) fee disclosure, following Department of Labor announcements Thursday on the final rulings.

The three-month extension of the final date was issued to give sponsors and administrators extra time to effectively prepare for a new level of transparency in the 401(k) market.

In recent months, the industry has asked for more time to comply with the rulings; Thursday’s announcement effectively finalizes those rules and starts the clock.

Changes to the ruling include more clarity on plan fiduciaries and their indirect compensation, plus more focused rules regarding investment-related disclosures. The latter, for instance, must now be declared annually.

The 401(k) fee disclosure rules were first issued in July 2010 with a one-year deadline for implementation, but the deadline was extended to April 1 after members of the industry raised concerns about the difficulties of preparing for and implementing those not-entirely-finalized rules.

The DOL has also delayed the implementation of a requirement for plan providers to offer a summary “roadmap” document of fees. That summary document will evidently be issued separately in June.

Concern remains that without the roadmap in place, plan sponsors will be required to create a best guess on meeting the rulings in disclosure documents, and then issue new disclosures in the future.

Plan administrators for calendar-year plans must now make their disclosures for plan-level and investment-level information by Aug. 30 of this year, with a first quarterly statement issued by Nov. 14, 2012

The DOL also announced it will soon solicit public comment on a separate proposal requiring providers to offer tools to assist plan fiduciaries in identifying and locating the information to be disclosed, located in a litany of documents.

Originally published on BenefitsPro. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Nichole Morford

Nichole Morford
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