The U.S. Department of Labor recently issued guidelines for the electronic distribution of mandatory investment and fee disclosures for participants in self-directed account plans subject to ERISA. This guidance may help plan administrators implement the new rules for the disclosure of quarterly and annual plan-related information, but still contains affirmative participant approval requirements for the electronic distribution of all initial disclosure notices and mandated investment-related information to participants. Prior to August 2012, plan sponsors and administrators of calendar-year plans should familiarize themselves with the new guidelines to determine what mandatory disclosures will be made in electronic format (if any), and whether their plans have sufficient systems and administrative capabilities to provide the mandatory disclosures in an electronic format.
The U.S. Department of Labor (DOL) recently issued new guidelines applicable to the electronic distribution of new mandatory investment and fee disclosures for participants in self-directed account plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). This electronic guidance may help plan administrators implement the new DOL rules for disclosure of quarterly and annual plan-related information, but still contains affirmative participant approval requirements for electronic distribution of all initial disclosure notices and mandated investment-related information to participants.
Background on the New Disclosure Requirements for Investment and Fee Information
In 2011 the DOL issued final rules mandating the disclosure of specific investment and fee information to participants in self-directed account plans subject to ERISA. These final rules require that certain disclosures, including detailed plan-related information and investment-related information, be included in an initial notice, which will also be updated and re-issued on an annual basis. Other disclosures, including a summary of the administrative and individual expenses charged against participant accounts, may be included in the quarterly account statements issued to participants. Under the transition rules applicable to calendar year plans, the initial disclosure notice is due to participants by August 30, 2012. Quarterly disclosure of the requisite plan-related information is required by November 14, 2012. For more information on the new DOL disclosure rules, see Department of Labor Issues New Rules on 401(k) Fee Disclosure to Participants. See the new DOL guidance on final regulations under ERISA section 408(b)(2) for a summary of the revised effective dates.
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