A regulation issued by the United States Department of Labor in 2010 will soon require fiduciaries of 401(k) plans and other tax-qualified defined contribution plans, as well as 403(b) plans, that are subject to the Employee Retirement Income Security Act of 1974 (ERISA) and that allow plan participants to direct the investment of their accounts to provide much more detailed information on plan fees and expenses that might be charged to participants’ accounts, and on plan investment options, than they have had to provide in the past.
The requirement goes into effect on August 30, 2012. A failure to comply with the requirement will be treated as a violation of the fiduciaries’ duties under ERISA.
The information that will be required is similar to but more comprehensive than the information that plans historically have had to provide if they wished to rely on the safe harbor for self-directed plans in section 404(c) of ERISA.
The requirement is described in detail in Part III of the attached memorandum. Please contact a member of the Executive Compensation and Employee Benefits group if you would like more information about the requirement.