August 8, 2013

Comparative Investment Chart for Retirement Plan Participants: A One-time Opportunity Looms

Last year, the Department of Labor’s rules requiring fee disclosures to qualified retirement plan participants went into effect (for background information about these disclosure requirements, please refer to the December 2011, July 2012,  and August 2012 editions of At Issue).  These rules are intended to provide plan participants with regular information about fees that are assessed against their investments. 

One of the requirements is an annual disclosure and comparative chart of investments.  The first comparative chart was due in August, 2012.  Thereafter, the chart must be provided annually, i.e., it must be provided within 12 months of the date it was provided in the previous year.  For example, if the disclosure was provided on August 25, 2012, it would have to be provided by August 25, 2013. 

On July 22, 2013, the DOL issued Field Assistance Bulletin (FAB) No. 2013-02, offering plan sponsors a one-time opportunity to re-set the disclosure date, with the intent of allowing plan participants to receive the comparative chart at the same time as other plan disclosures are provided.  For calendar year plans, many disclosures are made in November or December, for example.  In effect, what the FAB provides is that as long as the 2013 comparative chart is provided within 18 months of the date the 2012 participant disclosure was mailed, it will be deemed timely. Thereafter, the comparative chart would have to be made within 12 months of the new date. 

The FAB goes on to provide that if the 2013 comparative chart has already been made, or the plan is well on its way to disclosing the comparative chart, the one-time re-set opportunity can be taken for the next comparative chart disclosure.  For example, if the 2013 comparative chart is made on August 10, the 2013, the comparative chart will be deemed timely, as long as it is accomplished by February, 2015.  This does not relieve the plan from its other participant fee disclosure obligations. 


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.