DOL Extends and Aligns Retirement Plan Fee Disclosure Rules

By on July 22, 2011

by Maureen O’Brien and Todd A. Solomon

The U.S. Department of Labor (DOL) issued a final regulation to extend and align the applicability dates for its retirement plan fee disclosure rules.

On July 16, 2011, an interim final regulation under the Employee Retirement Income Security Act of 1974 (ERISA) Section 408(b)(2) was published requiring covered service providers of retirement plans to disclose comprehensive information about their fees and potential conflicts of interest to ERISA-covered plan fiduciaries. This regulation was to become effective with respect to plan contracts or arrangements for services in existence on or after July 16, 2011. The new, final rule moves the effective date of the ERISA Section 408(b)(2) regulation to April 1, 2012.

In addition, the DOL published a final participant-level regulation on Oct. 20, 2010, requiring that employers disclose information about plan and investment costs to participants who direct their own investments in ERISA-covered 401(k) and other individual account retirement plans. This regulation, which applies to plan years beginning on or after Nov. 1, 2011, contained a 60-day transition rule that permitted initial compliance no later than 60 days after the beginning of the first plan year on or after Nov. 1.

The new final rule retains a modified version of the 60-day transition rule that works in conjunction with the new effective date of the 408(b)(2) regulation.  For example,
participant-level disclosure regulation becomes applicable on January 1, 2012 for calendar year plans. Pursuant the final transitional rule, such plans must furnish their first set of initial disclosures (all disclosures other than disclosures required at least quarterly) no later than May 31, 2012, which is 60 days after the April 1, 2012 effective date of the 408(b)(2) regulation.

Please contact your regular McDermott attorney with any questions regarding the retirement plan fee disclosure rules.




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