U.S. Department of Labor (DOL) regulations require 401(k) plan fiduciaries to provide plan participants with a detailed disclosure statement about the plan’s designated investment alternatives, prior to initial enrollment and at least annually thereafter. The DOL’s Employee Benefits Security Administration (EBSA) has interpreted the “annual disclosure requirement” to mean that any subsequent disclosure had to be provided not more than 12 months after the previous disclosure. As the initial disclosures were due no later than August of 2012, the Department of Labor issued a one time “reset” rule under FAB 2013-02 that allowed a one-time 18 month window to provide the disclosures so that plan sponsors could align this fee information with other participant disclosures.
On March 19, 2015, the EBSA issued a direct final rule defining the “at least annually thereafter” to mean that the disclosure must be provided at least once in any 14 month period without regard to whether the plan has a calendar or a fiscal plan year. Technically, the amendment is effective on June 17, 2015 (90 days after release). However, the Department of Labor has announced a temporary non-enforcement policy that would immediately apply the 14-month rule.
Plan sponsors that have delegated the preparation of the participant fee disclosures to their plan service providers, may want to contact the provider if there is a desire to change the schedule for delivery of the annual participant fee disclosure under 29 CFR § 2550.404a-5.