The US Department of Labor (DOL) has extended the deadline for furnishing annual participant-level fee disclosure comparative charts. This relief provides plan administrators with an opportunity to reset the deadline for furnishing future annual comparative charts. As a result, annual comparative charts otherwise due in August 2013 may be furnished as late as February 2014. This will have the effect of delaying annual comparative charts for 2013 and, in some cases, 2014. Special relief is also available to plan administrators who have already furnished 2013 comparative charts. This is welcome news for many plan administrators.
Annual Participant Fee Disclosures
In 2010, the DOL published final regulations on participant-level fee disclosure, which require plan administrators of individual account plans subject to ERISA to provide certain participant-level fee disclosures to plan participants and beneficiaries. These regulations require plan administrators to provide a comparative chart showing participant-level fees on investments on at least an annual basis. The first comparative chart was required to be provided to participants by August 30, 2012. Subsequent comparative charts are required to be provided to participants at least annually and no later than 12 months after the prior comparative chart was furnished. As a result, prior to this extension, plan administrators who furnished the 2012 comparative chart to participants in August 2012 were required to provide an updated comparative chart by the one year anniversary of such disclosure in August 2013.
Many plan administrators were concerned that the timing of annual comparative chart disclosure does not correlate to the timing of any other annual participant communications. Providing separate mailings for annual comparative charts is administratively burdensome and expensive. Moreover, furnishing comparative charts in August may not be the most ideal time for participants to review such disclosure.
DOL Temporary Enforcement Policy
In response to concerns expressed by plan administrators, the DOL issued Field Assistance Bulletin No. 2013-02, which provides plan administrators with additional time to provide the annual comparative chart due for 2013. This provides plan administrators a one-time option to “reset” the time to furnish the annual comparative chart. The 2013 comparative chart may be furnished up to 18 months after the first comparative chart was furnished to participants and beneficiaries. For example, if a plan administrator furnished the 2012 comparative chart on August 25, 2012, the deadline for furnishing an updated comparative chart may now be extended from August 25, 2013 to as late as February 25, 2014. If it would be more convenient and cost-effective for the plan administrator to furnish the annual comparative chart with other year-end disclosures in December, the plan administrator may furnish the annual comparative chart in December 2013, and then do so annually each December thereafter.
The DOL provides special relief for plan administrators who have already furnished the 2013 comparative chart or who intend to furnish the 2013 comparative chart by the original deadline because they have already taken steps and incurred costs to prepare such chart. These plan administrators may furnish the 2014 comparative chart no later than 18 months after furnishing the 2013 comparative chart. As a result, a plan administrator who furnished the 2012 comparative chart on August 15, 2012 and who intends to furnish the 2013 comparative chart on August 15, 2013 would have until February 15, 2015 to furnish the 2014 comparative chart.