The Department of Labor (DOL) has provided more guidance for employer sponsored 401(k) participant fee disclosure reporting.
In March 2015, the DOL issued a direct final ruling that changes certain rules regarding participant fee disclosures. The goal is to offer plan sponsors a little more time in providing participant level fee disclosures while providing plan participants timely information to make investment choices.
Previous law: plan sponsors were required to disclose certain fee and expense information to participants. The information was required to be presented to participants before they were able to make investment choices and then was required to be provided at least annually thereafter (once every twelve months)
One of the confusing issues to sponsors was if they had to keep track of the exact date the disclosures were sent, and what was the requirement for plans that were not calendar year ends.
This latest ruling clarifies what is required: “annually” means at least once in a 14-month period, without regard whether the plan operates on a calendar or fiscal year end. This new definition balances out the disclosure so that participants will still receive timely fee and expense information, while providing the plan administrators flexibility to provide the participants information on a timely basis.
For more information about employer sponsored 401(k) plan compliance or more information about employee benefit plan audits call Maria Arriola at 714.569.1000.
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For over 30 years, Maria has served clients in a variety of areas including financial statement audits, reviews and compilations as well as business and individual taxation. Maria excels working with clients in the real estate, and healthcare industries, along with employee benefit plans.
You can reach Maria at 714-569-1000