April 7, 2015

Annual Fee Disclosure Timing Clarified (article)

Annual Fee Disclosure Clairified
For several years now, plan sponsors of participant-directed account plans, such as 401(k) plans and 403(b) plans subject to ERISA, have been required to disclose certain plan information to plan participants. Specifically, participants must be provided plan-related information on an annual basis prior to an individual’s ability to make an investment. In addition, plan sponsors must also provide investment-related information to plan participants that identifies performance and benchmarking data together with fees and expenses in comparative format. 


There are two types of participant level fee disclosures: one is an annual disclosure and one is a quarterly disclosure.  With regard to the annual disclosure requirement, the DOL’s Employee Benefit Security Administration recently modified the timing of the annual disclosure to permit up to 2-month grace period to furnish the disclosure.  Annual disclosures must be provided at least once in any 14-month period, without regard to whether the plan operates on a calendar-year or fiscal-year basis.   This rule takes effect on June 17, 2015.


 The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. 

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