Adrift in a Sea of Disclosure: New DOL Rules Require Disclosure of Plan Fees to Participants
By Eric Keller, Stephen Harris & Joshua H. Sternoff
Last Thursday, the Department of Labor issued final regulations under ERISA Sections 404(a) and 404(c) requiring plan administrators to disclose certain plan and investment-related information, including fee and expense information, to an estimated 72 million participants in individual account plans with participant-directed investments (e.g., 401(k) plans). The regulations take effect 60 days after publication in the Federal Register and apply to plan years beginning on or after November 1, 2011 (for calendar year plans, this means January 1, 2012).
Although the regulations refer to required disclosures, it is unclear whether the Department of Labor intended to create a mandatory set of disclosures or merely to provide a set of disclosure requirements that, if satisfied, would provide a safe harbor for demonstrating fiduciary compliance with the duty to disclose. Nevertheless, plan administrators are well advised to treat the disclosure requirements as mandatory (and the balance of this Client Alert assumes that they truly are required).