On June 1, 2011, the Department of Labor (the “DOL”) published a proposal to extend the applicability dates of the new retirement plan fee disclosure rules under the Employee Retirement Income Security Act of 1974 (“ERISA”).
Service Provider Disclosure Rules
In July 2010, the DOL published an interim final rule requiring retirement plan service providers to disclose comprehensive information about their fees and potential conflicts of interest to plan sponsors (the “Service Provider Disclosure Rules”). The July 16, 2010 SGR Client Alert addressing the Service Provider Disclosure Rules can be accessed by clicking here. The DOL’s proposal extends the effective date of the Service Provider Disclosure Rules from July 16, 2011 to January 1, 2012.
Participant Disclosure Rules
In October 2010, the DOL published a final rule requiring employers to disclose information about plan and investment costs to participants who direct their own investments (the “Participant Disclosure Rules”). The October 25, 2010 SGR Client Alert addressing the Participant Disclosure Rules can be accessed by clicking here.
The Participant Disclosure Rules are applicable for plan years beginning on or after November 1, 2011 (January 1, 2012 for calendar year plans). Although the DOL received many requests to extend the applicability date of the Participant Disclosure Rules, it did not extend the applicability date. Rather, the DOL did propose to extend the transition rule under the Participant Disclosure Rules. Pursuant to the extended transition rule, a plan would have 120 days (rather than 60 days) after its applicability date to furnish plan participants with the initial disclosures required under the Participant Disclosure Rules. This means that the initial participant disclosures for a calendar year plan would be required to be furnished no later than April 30, 2012, and the quarterly statement of fees/expenses actually deducted would be required to be furnished no later than May 15, 2012.
For more information, please contact your SGR Executive Compensation and Employee Benefits counsel.