The U.S. Department of Labor (DOL) announced today in Field Assistance Bulletin (FAB) No. 2013-02 that it was adopting a temporary enforcement policy that would offer plan administrators temporary relief from certain of the participant disclosure requirements in the form of a one-time “re-set.”
Under DOL regulations issued in October of 2010, administrators of calendar year plans were required to disclose to participants for the first time detailed comparative charts of plan investment options by no later than August 30, 2012. The regulations also required that plans had to again furnish these comparative charts “at least annually thereafter,” which was defined as at least once in any 12-month period, without regard to whether the plan operates on a calendar or fiscal year basis. Therefore, if a plan administrator provided the comparative chart in August of 2012, it had to again provide the comparative chart by the same day in August of 2013.
The DOL indicated in the FAB that some plan administrators expressed concerns about this timing, in that the comparative charts could not be combined with other annual participant disclosures (e.g., those required at the end of the plan year). This would result in additional costs, and perhaps be less likely to get the attention of plan participants. Under the current DOL regulations, this could only be avoided by plan administrators if they “re-set” the deadline by providing two comparative charts within the same 12-month period (for example, if a plan administrator provided a second chart in January of 2013 and each subsequent January thereafter). However, this would result in additional plan costs that could be passed along to participants.
In response to these concerns, the FAB provides additional flexibility to plan administrators by allowing them to align the comparative chart deadline with other plan disclosure and notice deadlines in a cost efficient manner. Specifically, if the plan administrator reasonably determines that doing so will benefit plan participants and beneficiaries, it may provide the 2013 comparative chart no later than 18 months after the first comparative chart was provided (i.e., the one provided no later than August 30, 2012). Thus, for example, if the first comparative chart was furnished on August 9, 2012, the DOL will take no enforcement action regarding the timeliness of the next comparative chart (which would otherwise have been due by August 9, 2013) if it is furnished by February 9, 2014.
For plan administrators that already furnished the 2013 comparative chart, the FAB permits such plan administrators to furnish the 2014 comparative chart using the same re-set rule that is available for the 2013 comparative chart.
The DOL noted that the relief provided by the FAB would not relieve plan administrators from other obligations under the DOL regulations relating to participant access to updated investment-related information. However, it did note that it is considering permanently revising the current requirement of a fixed deadline for furnishing the comparative charts to give plan administrators more flexibility. Specifically, it is considering replacing the hard deadline at the end of the 12-month “at least annually” period with a 30-day or 45-day window during which such charts could be provided.