DOL Extends 404(a)(5) Participant Fee Disclosure Deadline

The Department of Labor (“DOL”) issued Field Assistance Bulletin (“FAB”) 2013-02 on July 22, 2013, extending the deadline for plan sponsors to make their second round of required 404(a)(5) participant fees disclosures.  The 404(a)(5) regulations, effective in 2012, required plan sponsors to provide certain fee disclosure information to participants by August 30, 2012.  The regulations also required that the disclosures be made annually to participants no later than the anniversary of the initial date they were provided in 2012.  For example, if in 2012 a plan sponsor provided the disclosures on July 31, 2012 then the 2013 disclosures would be due no later than July 31, 2013.


FAB 2013-02 extended enforcement of the 12 month deadline , as set forth by the regulations, to 18 months, effective for the second round of 404(a)(5) disclosures.  In the above example, the plan sponsor now has until January 31, 2014 to make their 2013 participant fee disclosures.  Assuming the disclosures are made on January 31, 2014, then going forward the next disclosures are due 12 months from that date.


This relief provides for a one time extension and may only be used once by plan sponsors.  Plan sponsors may only elect to use the extension if a plan administrator reasonably determines delay will benefit participants (for example, reducing plan administrative costs or by providing the information at a time more relevant to participant).  If a plan sponsor has already made the 2013 participant fee disclosures they may take advantage of the extension with their 2014 disclosures.  The FAB should allow plan sponsors to reduce costs by aligning the timing of fee disclosures with other required annual disclosures that typically occur around the beginning of a plan year.  This will prevent duplicative mailing costs and enable participants to consider the disclosures at the same time they receive other important plan disclosures.


The FAB also helps reduce the impact of deadline creep.  Interpreted literally, the regulations state that the participant fee disclosures are due by the anniversary of the previous disclosure.  So if a plan sponsor provides the fee disclosures earlier than the latest possible deadline, then over time the deadline will become earlier and earlier.  The DOL has announced they are considering changing the regulations to allow a 30-45 day disclosure window to prevent this from occurring and has requested public comments.


It is important to note that FAB 2013-02 does not extend the deadline of the required 408(b)(2) covered service provider fee disclosures to plan sponsors or any other required plan disclosures.

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