In 2010, the Employee Benefits Security Administration (“EBSA”) published final regulations requiring plan administrators to disclose to plan participants detailed information about the fees they may pay under the plan sponsor’s participant-directed account plan. Plan administrators must disclose:
- general information about the plan, administrative expenses and individual expenses; and
- investment-related information, including performance data, securities market benchmarks, and fee expense information (the “comparative chart”).
For most plans, the regulations required plan administrators to first provide these participant fee disclosures between July 1, 2012 and August 30, 2012. The comparative chart is required “at least annually thereafter.” DOL Reg. § 2550.404a-5(d)(1). So, the date on which you sent fee disclosure notices last year, determines the deadline for providing them this year and in the future. For example, if you first sent the fee disclosure notices on July 24, 2012, your next deadline for sending them is July 24, 2013.
The EBSA reports that it received a lot of complaints about this annual deadline. Many noted that the fee disclosure notices don’t correlate with the deadlines for other annual participant disclosures. In addition, the fee disclosure notices require a separate mailing in the middle of the plan year, raising administrative costs, which might be passed on to plan participants. Finally, some think that plan participants might review these important notices more carefully if they were distributed together with other important plan notices during annual enrollment periods, for example.
Persuaded by these cries, the EBSA now provides you a chance to reset the deadline for providing the comparative chart. In DOL Field Assistance Bulletin (FAB) 2013-02, the EBSA extended the deadline for plan administrators to send the notice by six months. So, using the above example, if your comparative chart was due by July 24, 2012, you can wait until January 24, 2014 to provide it.
If you’ve already sent your comparative chart for this year, FAB 2013-02 allows you to reset your deadline in 2014. Plan administrators who have already furnished the chart can furnish the 2014 comparative chart 18 months after furnishing the 2013 chart.
Curiously, the FAB only addresses the comparative chart. The deadline for the annual notice for plan-related information (e.g., administrative expenses) was not extended. This may be an EBSA oversight, which seems likely since allowing a delay of only a portion of the fee disclosure requirements would thwart the EBSA’s explicit purposes in allowing a delay at all. Stay tuned for more details on this, but in the meantime; consider delaying the comparative chart to take advantage of the administrative efficiencies the FAB provides.