Update: One-Time Extension for Furnishing Annual Fee Disclosures to Participants

Earlier this month we reminded you that plan administrators of participant-directed ERISA defined contribution retirement plans (e.g., 401(k) plans, 403(b) plans, profit sharing plans and money purchase plans) had to annually disclose certain fee information to participants and beneficiaries, and that for most plans there was an upcoming deadline in August 2013 for the second round of annual notices. Please click here to read that prior Alert. We noted in that Alert that practitioners and employers had appealed to the U.S. Department of Labor (“DOL”) to provide some flexibility to plans regarding the timing of the annual disclosures. We now write to inform you that the DOL has recently released guidance providing for a one-time extension of the deadline to provide annual fee information.

The DOL has released a temporary enforcement policy providing that a plan administrator is able to furnish the second round of annual “comparative charts”1 no later than 18 months after the prior (i.e., the first) comparative chart was furnished. Given that for most plans the first annual fee disclosure notices were initially required by August 30, 2012, the second round of annual fee disclosure notices now will be due as late as February 2014. For example, if a plan had distributed its first comparative chart on August 25, 2012, the second distribution would be due no later than August 25, 2013, but under the DOL’s guidance the plan now has until February 25, 2014 to make the second distribution. This gives plan administrators a one-time opportunity to “reset” the timing for the distribution of their plans’ annual fee disclosure notices (in subsequent years, the annual disclosure will be due by the yearly anniversary date of the prior years’ distribution, which date could change from year-to-year depending on the actual distribution date each year).

Please see full alert below for more information.

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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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