Stay informed and ready to meet both everyday challenges and long-term planning and policy-making goals, with focused news, practical information, and strategic insights on all HR-related...
By Sean Forbes
March 18 — The Department of Labor is giving retirement plan administrators a two-month buffer period for providing annual fee disclosures to plan participants, the agency said in a final rule announced March 18.
Under a 2010 DOL regulation, plan administrators must provide fee disclosures to participants in participant-directed individual account plans, such as 401(k) plans, at least annually, after a participant can first direct his or her investments.
The current regulatory language defines the phrase “at least annually thereafter” as “at least once in any 12-month period, without regard to whether the plan operates on a calendar or fiscal year basis,” the DOL said.
The direct final rule (RIN 1210-AB68), published in the March 19 Federal Register (80 Fed. Reg. 14,301), replaces “12-month period” with “14-month period.”
Jan Jacobson, senior counsel for retirement policy at the American Benefits Council in Washington, told Bloomberg BNA March 18 that the rule “is a very workable solution.”
The ABC, along with the American Retirement Association (formerly the American Society of Pension Professionals & Actuaries), the American Council of Life Insurers, the ERISA Industry Committee and several other groups, sent the DOL a letter in October requesting at least a 45-day window to provide plan sponsors with flexibility in providing the required notices.
The agency also March 18 issued a proposed rule that is the same as the final rule and also was published in the March 19 Federal Register (80 Fed. Reg. 14,334). If commenters don't object to the proposed rule, the final rule will go into effect. If the agency receives “significant adverse comment,” it will withdraw the final rule.
Jacobson said she'd be surprised if the DOL receives adverse comments on the rule.
The DOL says on its website that an agency will issue a direct final rule when it thinks a rule “is noncontroversial and unlikely to receive adverse comments.” Such a rule is accompanied by a proposed rule that goes into effect unless an adverse comment is received, in which case the agency withdraws the final rule and proceeds with the proposed rule under normal notice and comment procedures, according to the DOL.
The DOL also adopted in the final rule a temporary enforcement policy, effective immediately, under which plan administrators may rely on the amended rule before its June 17 effective date.
A plan administrator will satisfy the new timing requirement if it complies with the new definition establishing a two-month grace period for annual disclosures, provided that it reasonably determines that doing so will benefit participants and beneficiaries, the agency said.
The enforcement policy will expire on the effective date of the direct final rule.
The final rule will go into effect June 17 unless adverse comments are received by an April 20 deadline.
To contact the reporter on this story: Sean Forbes in Washington at email@example.com
To contact the editor responsible for this story: Phil Kushin at firstname.lastname@example.org
Text of the direct final rule is available at http://op.bna.com/pen.nsf/r?Open=sfos-9uqhe7, the proposed rule at http://op.bna.com/pen.nsf/r?Open=sfos-9uqhxd, and a fact sheet at http://www.dol.gov/ebsa/newsroom/fsdirectfinalrule.html.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)