Model Participant-Directed Defined Contribution Plan Investment/Expense Disclosure Package
By Ethan Lipsig & Eric Keller
Last year, the Department of Labor issued a regulation, 29 C.F.R. § 2550.404a-5, requiring plan administrators of 401(k) and other defined contribution plans that permit participants to direct how their accounts are invested to provide, starting next year, very detailed investment and expense information. To comply, (1) a special notice must be given to existing participants no later than the effective date described below; (2) thereafter, this special notice must also be given to a participant (normally, a new participant) before he or she first becomes eligible to direct plan investments; (3) the special notice also must be given at least annually and when certain information in it changes; and (4) other special information must be included in quarterly benefit statements.
The Department of Labors new disclosure regulation does not provide a comprehensive model disclosure package, although it does include a form of comparative chart that would satisfy some of the new requirements. Because that chart does not satisfy all of the new disclosure requirements, we created the copyrighted model package attached to this client alert, which incorporates a slightly modified version of the Department of Labor chart. Our model package is intended to be a starting point from which plan administrators can develop customized disclosures that will satisfy all of the new requirements. A Word copy, which we likely will update from time to time, is available at