In just a couple of weeks, new Department of Labor (DOL) 401(k) fee disclosure regulations will take effect. Are you prepared to meet its requirements as a plan sponsor?
There are three parts to the new fee disclosure rules, all designed to clarify fees and compensation associated with servicing covered retirement plans. Part one requires notifying the Department of Labor. Part two requires service providers to notify plan fiduciaries. Part three requires plan sponsors to notify participants.
Compliance is crucial. Fiduciaries are charged by ERISA with certain responsibilities. Failure to meet those responsibilities can result in fines ranging from 5% to 100% of the amount involved in the failure, excise taxes, and civil or criminal penalties.
Fee disclosure is effective July 1, 2012. Plans then have 60 days from the later of that date or the first day of their plan year following November 1, 2011 to make the disclosures to participants and beneficiaries. For January 1, April 1, and July 1 plans, then, disclosures are due from the plan sponsor by August 31, 2012. Plans that operate on an October 1 to September 30 plan year must provide disclosures by November 30, 2012. All plans must make the disclosures at least once every year after the initial disclosure.
BLR has created a series of videos that provide further details on the new 401(k) fee disclosure requirements:
We’ve also put together a comprehensive resource for compliance, 2012 New 401(k) Fee Disclosure Compliance, which provides you with explanations, checklists, samples, charts, fact sheets and the actual DOL regulation from Federal Register. It will guide you through the maze of establishing the framework for disclosure and help you develop the communications for compliance.
- provides background information and your role.
- describes what information will soon be available to you and how to disclose it to plan participants, including a FAQ section and key dates,and
- gives you sample communication plan and sample forms and statements to distribute to participants.