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.