Once the ERISA Section 408(b)(2) fee disclosures are made from covered service providers to plan fiduciaries, plan fiduciaries are required to relay fee information relating to designated investment alternatives to plan participants. The Department of Labor issued final regulations in 2010 outlining the requirements for these new disclosures, 29 CFR §2550.404(a)-5 and at the same time modified ERISA Section 404(c) regulations to incorporate the 404(a)(5) disclosures.
The participant disclosure statements are due August 30, 2012. This week, the Department of Labor issued Field Assistance Bulletin No. 2012-02 providing significant Q&A guidance on a number of open issues not addressed in the final Regulation. Some of the items addressed include:
- open brokerage accounts;
- revenue sharing offsets of fees;
- 403(b) plans;
- directing participants to websites for supplemental investment information; and
- satisfying the requirement for a glossary of investment terms.
While many bundled mutual fund, trust company and insurance company providers are agreeing to produce the required disclosure statements, some plan administrators will need to generate the statements on their own.
The Field Assistance Bulletin can be found at http://www.dol.gov/ebsa/regs/fab2012-2.html