On July 13, 2011, the Department of Labor (“DOL”) issued a final rule (the “Final Rule”) extending and aligning the applicability dates for its retirement plan fee disclosure rules. As a reminder, on July 16, 2010, the DOL issued an interim final rule enhancing the disclosures required to be made by service providers to plan fiduciaries of defined benefit and defined contribution retirement plans (the “Service Provider Disclosure Rules”). [See the July 16, 2010 SGR Client Alert addressing the enhanced disclosure to plan fiduciaries.] Additionally, on October 20, 2010, the DOL issued a final rule requiring the disclosure of certain plan fee and expense information by plan administrators to participants in participant-directed individual account retirement plans, such as 401(k) plans (the “Plan Administrator Disclosure Rules”). [See the October 25, 2010 SGR Client Alert addressing the required disclosures to plan participants.]
The Final Rule extends the effective date for the Service Provider Disclosure Rules from July 16, 2011 to April 1, 2012. The Plan Administrator Disclosure Rules contained a transition rule that required initial disclosures be provided to participants no later than 60 days after the first day of the first plan year beginning on or after November 1, 2011 (March 1, 2012 for calendar year plans). Without also extending the date by which disclosures were required under the Plan Administrator Disclosure Rules, it was possible that plan administrators would have been required to provide disclosures to participants before such information was required to be disclosed by the plan’s service providers. Accordingly, the Final Rule amends the transition rule under the Plan Administrator Disclosure Rules to require that initial disclosures be provided to participants no later than 60 days after the later of (i) the first day of the first plan year beginning on or after November 1, 2011, or (ii) April 1, 2012. For calendar year plans, initial participant-level fee disclosures must be provided by May 31, 2012.
For more information, contact your SGR Executive Compensation and Employee Benefits counsel.