New Disclosures for Participant Directed Accounts
NEW REGULATIONS UNDER §2550.404A-5 REQUIRE ONGOING FEE DISCLOSURES FOR PARTICIPANT DIRECTED ACCOUNTS
The Department of Labor has issued regulations requiring annual and quarterly disclosures to all plan participants who may direct the investments of their individual defined contribution plan accounts (typically 401(k) plans). Under federal law, the Plan Administrator (typically the employer sponsoring the plan) has a fiduciary responsibility to ensure adequate information is provided timely.
For most plans, the first installment of annual information must be made available by August 30, 2012 with the first quarterly installment made available by November 14, 2012.
Plan sponsors should contact their plan’s record-keeper or investment manager immediately to determine who will provide the required information directly to participants on an ongoing and timely basis.
The information contained herein is intended only as a summary of the requirements under the new regulations. This information may not be relied upon as legal advice or to determine the full scope of requirements under the regulations. Please contact legal counsel for more information. The full text of the regulations may be found here.