Beginning on August 30, 2012, plan administrators of 401(k)
plans and other participant-directed individual account plans must
disclose certain plan and investment-related information to
participants and beneficiaries under final regulations issued by
the Department of Labor ("DOL"). The regulation is
intended to ensure that all plan participants who have the right to
direct the investment of their accounts will have the information
they need to make informed decisions about the management of their
plan accounts and the investment of their retirement savings.
Which Plans are Subject to the Participant-Level Fee Disclosure
Rules?
Participant-level fee disclosures must be made to participants
in any participant-directed individual account plan, other
than:
A simplified employee pension; or
A SIMPLE retirement plan.
Participant-level fee disclosures are not required to be made
with respect to any plan where the employer directs plan
investments, such as a defined benefit plan.
Who Has The Responsibility to Make the Participant-Level Fee
Disclosures?
The plan administrator of the plan.
Which Individuals Have the Right to Receive the Fee
Disclosures?
Any participant or beneficiary who has the right to direct the
investment of assets contributed to his or her individual account.
This includes any employee who is eligible to participate in the
plan, even if that employee is not actually enrolled in the
plan.
What Types of Information Must Be Disclosed to
Participants?
The plan administrator must disclose information in two
categories:
plan-related information and
investment-related information.
What Kind of Plan-Related Information Must be Disclosed?
Initial and Annual Disclosures. The following
plan-related information must be disclosed on or before the date
the participant can first direct his or her investments and
annually thereafter:
An explanation of how the participant gives investment
instructions;
An explanation of any plan limitations on giving investment
instructions, including any restrictions on transfer to or from a
designated investment alternative;
A description of plan provisions relating to the exercise of
voting, tender and similar rights as to a designated investment
alternative, and any restrictions on these rights;
An identification of any designated investment alternatives
offered under the plan. A "designated investment
alternative" means any investment alternative designated by
the plan into which participants can invest their accounts, but
does not include any brokerage windows, self-directed brokerage
accounts or similar arrangements;
An identification of any designated investment managers; "
A description of any brokerage windows, self-directed brokerage
accounts or similar arrangements;
An explanation of any fees and expenses for general plan
administrative services (auditor's fee, recordkeeping) that may
be charged against the participant's account which are not
reflected in the total annual operating expenses of any designated
investment alternative, as well as the basis on which these fees
are allocated (i.e., per capita or pro rata); and
An explanation of any fees and expenses that may be charged
against a participant's account on an individual, rather than a
plan-wide, basis (such as a loan processing fee) and that is not
reflected in the total annual operating expenses of any designated
investment alternative.
The above information can be distributed as a standalone
document or it can be distributed as part of the SPD or a
participant benefit statement. Note, if the required disclosures
are part of the SPD or participant benefit statement, these
documents must be distributed before the initial investment
decision and at least annually thereafter to comply with the fee
disclosure timing rules.
If there is a change to any of the annual disclosures, the plan
administrator must notify each participant of the change at least
30 days, but not more than 90 days, in advance of the effective
date of the change.
Quarterly Disclosures. The following
plan-related information must be disclosed to participants on a
quarterly basis:
The dollar amount of fees and expenses for general plan
administrative expenses charged to the participant's account
during the preceding quarter and a description of the services to
which the charges relate;
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
The Departments of Labor, Treasury, and Health & Human Services have issued new guidance on the content requirements for health plan summaries of benefits and coverage ("SBCs").
E-mail can be powerful evidence in a dispute, and whether employers and criminal investigators may use employee e-mail in litigation proceedings is a hot topic. A recent New York federal court decision outlined the current law in this area.
I wrote two years ago about the challenges employers face when an employee attributes his or her misconduct to a disability.
I wrote two years ago about the challenges employers face when an employee attributes his or her misconduct to a disability.
Twitter
Facebook
Digg 
