Deadline For Annual Participant Fee Disclosure Extended For Six Months


On July 22, the Department of Labor (DOL) issued Field Assistance Bulletin No. 2013-02 (FAB 2013-02) that extended the deadline for plan sponsors to provide 2013 annual participant fee disclosures by six months.  Under the final participant fee disclosure rules, plan sponsors of participant directed individual account plans (such as 401(k) plans) were required to provide initial annual participant fee disclosures by August 30, 2012 for calendar year plans and subsequent annual disclosures at least once in any 12-month period thereafter. 

Under FAB 2013-02, the DOL provides plan sponsors with an one-time six-month extension to provide the second annual participant fee disclosures – now due 18 months after the initial disclosures.  For example, if a plan sponsor provided the initial disclosures on August 25, 2012, the plan sponsor need not provide the second annual disclosures until February 25, 2014, which were originally due August 25, 2013 without the extension.  This allows plan sponsors to distribute the annual fee disclosures together with other annual notices that are generally due later in the year, such as safe harbor and automatic enrollment notices. 

With respect to plan sponsors who have already provided the second annual fee disclosures, FAB 2013-02 allows such sponsors to take advantage of the six-month extension for the third annual fee disclosures.  In addition, the DOL indicated that it is considering loosening the annual disclosure requirement to allow for a 30-day or 45-day window during which a subsequent annual disclosure would have to be furnished instead of fixing the disclosure deadline to the date that is 12-months from the prior disclosure.  However, such considerations have yet to be finalized, and plan sponsors must continue to follow the 12-month deadline, or the one time 18-month deadline, for now. 

This may be an opportune time for plan sponsors to review the requirements of the final participant fee disclosure rules under Section 404(a) of ERISA and the related final service provider fee disclosure rules under Section 408(b)(2) of ERISA.  Click here for our presentation on Service Provider and Participant Fee Disclosure Rules and Practical Issues.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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