ERISA Participant Fee Disclosure Notice Deadline Extended (But Only a Little Bit)

by Sherman & Howard L.L.C.

On July 22, 2013, the U.S. Department of Labor (DOL) issued Field Assistance Bulletin Number 2013-02, which offers sponsors of ERISA-covered retirement plans temporary relief from the participant fee disclosure deadline requirements. The relief is in the form of a one-time "re-set" of the annual date by which those disclosures are required to be provided to plan participants.


Under the DOL regulations issued in October of 2010, administrators of calendar year retirement plans were required to disclose to participants for the first time detailed comparative charts of plan investment options no later than August 30, 2012. Those regulations also provided that the retirement plan had to furnish these comparative charts "at least annually thereafter," and the regulations defined "annually" as at least once in any 12-month period. This regulation applied for retirement plans that operated on a calendar year or a fiscal year. As a result, if a plan administrator provided the comparative chart to its plan participants in August of 2012, it had to provide the next annual comparative chart by the same day in August of 2013.

DOL Guidance

In the guidance issued this week, the DOL recognized concerns from employers about this timing, because the participant disclosures and comparative charts could not be combined with other annual participant disclosures and notices.

In response to these concerns, the DOL provides flexibility to plan administrators by allowing them to align the participant disclosure and comparative chart deadline with other plan disclosure and notice deadlines. Specifically, if the plan administrator reasonably determines that doing so will benefit plan participants, the plan administrator may provide the 2013 participant disclosure and comparative chart no later than 18 months after the first comparative chart was provided (which was required to be provided no later than August 30, 2012).

For example, if the plan administrator distributed the first participant disclosure and comparative chart on August 15, 2012, there will be no violation of the deadline for providing the next annual disclosure and comparative chart (which would otherwise have been due by August 15, 2013) if it is furnished by February 15, 2014. All subsequent disclosures would be required to be made within 12 months of the date the distribution of the materials for 2013 is actually made. However, additional guidance may be coming that may allow for a 30- to 45-day window for providing the disclosures.

For plan administrators that already have distributed the 2013 participant disclosure and comparative chart, the DOL permits such plan administrators to distribute the 2014 disclosure and comparative chart using the same timing rule that is available for the 2013 disclosures (that is, by February 15, 2015). While the DOL could have issued this relief earlier this year so that plan sponsors would have more time to reschedule their participant mailings, it is indeed welcome relief for plan sponsors that desire to combine all of the participant disclosures and notices into one package.

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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