Categories: Technology

Last year, two significant sets of regulations were issued that will affect qualified plan fiduciary responsibility and administration.  Last July, interim final regulations were issued requiring retirement plan service providers to disclose detailed information regarding their fees and potential conflicts of interest to plan fiduciaries.  These service provider disclosures were scheduled to apply to plan contracts and arrangements for services on or after July 16, 2011.  Since those regulations were issued, there has been much discussion surrounding compliance with these rules, including whether a summary format of information might be necessary to help plan sponsors understand and know what to do with the financial information that will be disclosed by plan service providers.  The Department then announced earlier this year that it would extend the compliance deadline to January 1, 2012, but this wasn’t yet official.  In addition, participant-level fee disclosure regulations were issued on October 20, 2010 to be effective for plan years on or after November 1, 2011 with a 60-day transition period.  These rules would require plan administrator’s of 401(k) plans, for example,  to disclose certain plan and fee information to participants who direct their investments.  On June 1, 2011, the Department proposed making the January 1, 2012 extension of the service provider disclosures compliance date official, as well as extending the time a calendar year 401k plan has to furnish the initial participant-level fee disclosures to no later than April 30, 2012 (and up to May 15, 2012 with regard to quarterly statements) in order to provided additional time for compliance and coordination of the two efforts. 

It is important to be mindful of these requirements and the upcoming due dates.  Plan sponsors and fiduciaries of 401(k) plans and pension plans will need to evaluate the reasonableness of the service provider fee disclosures that they will receive and be prepared to terminate contracts/arrangements with service providers that do not comply with the rules. In addition, fiduciaries of 401(k) plans will need to be prepared to organize and distribute the participant-level fee disclosures in accordance with the requirements of those rules.  To the extent there are comments on these proposed effective dates, the Department of Labor is currently soliciting comments on these proposals to extend the effective date of the rules mentioned above.  Comments can be submitted on or before June 15, 2011 and can be submitted electronically to

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