Human Resources
New FAQs Provide Participant Fee Disclosure Guidance | Aon

New FAQs Provide Participant Fee Disclosure Guidance — Next Steps for Plan Sponsors


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Updated September 2012

In October 2010, the U.S. Department of Labor (DOL) issued regulations requiring plan administrators to furnish certain information, including plan fee and expense information, to participants and beneficiaries in retirement plans that include participant-directed investment selection. In February 2012, the DOL issued regulations requiring certain covered service providers to furnish specified information to retirement plan fiduciaries. The covered service provider disclosures are structured so that plans are able to comply with their disclosure obligations under the participant-level disclosure regulations. On May 7, 2012, the DOL published additional guidance (Field Assistance Bulletin (FAB) 2012-02) addressing frequently asked questions (FAQs) concerning these new disclosure rules. This guidance was revised by the publication of FAB 2012-02R on July 30, 2012.

FAB 2012-02R consists of a series of FAQs that address such topics as the description of administrative expenses, designated investment alternatives, and the form and content of investment-related disclosures and transition rules. By clarifying certain issues, the new guidance provides some assistance to plan sponsors as they prepare to meet their new legal obligation to furnish detailed plan fee and expense information to participants and beneficiaries in covered plans. Covered plans should review the new guidance now to determine if any changes to participant disclosures are required prior to the disclosure deadline (which for calendar year plans is August 30, 2012).

Certain open issues remain, and the DOL confirmed that it intends to issue an additional set of FAQs regarding the service provider disclosure rules. Despite the uncertainty around both of the covered service provider and participant-level disclosure regulations, the DOL was not persuaded to extend the compliance deadlines. The FAB confirms that the initial compliance deadline for participant disclosure for calendar year plans remains August 30, 2012, but includes certain additional, albeit limited, relief for good faith reliance. That relief is described in this report and is followed by a summary of the FAB organized as follows: Administrative Expense Information, Designated Investment Alternatives, Investment-Related Information, and Next Steps for Plan Sponsors.

New FAQs Provide Participant Fee Disclosure Guidance (September 2012)