Participant Fee Disclosures: General, Annual, Quarterly
Participant fee disclosure regulations were issued by the Department of Labor (DOL) on October 20, 2010. The new rules apply for plan years beginning after October 31, 2011; this means they apply to calendar plan years beginning in 2012. SunGard Relius recently posted additional Technical Updates that provide questions and answers on the new participant fee disclosure regulations. These are parts IV and V of their series of FAQs on participant fee disclosure. Part IV addresses general plan disclosures and Part V, annual and quarterly disclosures of individual and administrative expenses.
Click on the titles of each Technical Update below to read the answers to the questions.
- What are the categories of general plan disclosures the plan administrator must provide?
- What are the "circumstances" under which participant may give investment directions?
- Is the explanation of limitations on investment direction "under the plan terms" limited specifically to provisions of the basic plan document?
- If a participant-directed individual account plan (e.g., 401(k) plan) gives the trustee authority to exercise any voting or other rights associated with plan assets, does the trustee still need to comply with disclosure 3 in Q&A-1 above? If so, how does the trustee comply?
- If the plan provides a brokerage account option, must the plan administrator provide disclosures with respect to the brokerage account option?
- What is a "designated investment alternative" for purposes of the general plan disclosures?
- When must the plan administrator provide the general plan disclosures?
- Must the plan administrator give the participants the initial general plan disclosures on the first day of eligibility?
- What does "at least annually thereafter" in Q&A-5 mean?
- What obligation does the plan administrator have in case a change occurs in the information described in Q&A-1?
- Do the change rules discussed in the previous Q&A depend upon whether or not the change is "material"?
- What documents may the plan administrator use to satisfy the obligation to provide the plan-related disclosures on or before the date the participant first can direct his/her investments?
- What types of expenses must the plan administrator disclose to the particpant and beneficiaries?
- What annual disclosures regarding expenses must the plan administrator make to the participant?
- What quarterly disclosures regarding expenses must the plan administrator make to the participant?
- What is the deadline for providing the disclosures?
- In describing the general administrative expenses on the annual and quarterly disclosures, must the plan administrator identify each plan expense or fee?
- In describing the individual expenses on the annual and quarterly disclosures, must the plan administrator identify each individual expense (including the dollar amount)?
- If the plan pays plan administrative expenses from the forfeiture account or from an ERISA recapture account, would the plan administrator need to reflect the payments on the quarterly disclosures?
- If an employer generally pays the general administrative expenses but the plan provides that the plan may pay for the general administrative expenses, would the plan need to address the expenses in the annual disclosures?
- What is a "designated investment alternative" for purposes of the plan disclosures?
- If there is a change to the annual disclosures of the general administrative or individual expenses, what are the responsibilities of the plan administrator to disclose the changes?
- Would a plan with a brokerage account option need to comply with the annual and quarterly disclosures?
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