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Participant Fee Disclosure Reporting Update Offers ‘Flexibility’

Posted by Carlo Berlingieri on Apr 9, 2015 3:41:00 PM

In March of 2015, the Department of Labor (DOL) issued a direct final ruling (See Federal Register, Volume 80, Number 53) that looks to change certain rules regarding participant fee disclosures.  The goal of the updated ruling is to offer plan sponsors more flexibility in providing participant level fee disclosures while still providing plan participants timely information to make investment decisions.


In the original ruling that was published in October 2011, starting for plan years beginning on or after November 1, 2011, plan sponsors were required to disclose certain fee and expense information to participants and beneficiaries for participant directed benefit plans. The information was required to be presented to participants before they were able to make investment decisions and then was required to be provided at least annually thereafter.  “Annually thereafter” was defined at the time was at least once in a twelve month period.

Now, you may be thinking to yourself, “When exactly do I need to provide the disclosures information”?  The DOL actually issued two subsequent Field Assistance Bulletins that stated that the first disclosures were due to the participants no later than August 30, 2013, and then each subsequent disclosure was to be provided no more than one year from the date of the previous disclosure.  The confusing part was, did the plan administrator have to keep track of the exact date the disclosures were sent, and what was the requirement for participant directed plans that were not calendar year ends?

The latest ruling in March 2015 now clarifies what is required. The new definition of what constitutes “annually” is that “annually” means at least once in any 14-month period, without regard to whether the plan operates on a calendar or fiscal year end.  In the Federal Register, it’s the DOL’s view that the new definition balances out the disclosure so that participants will still receive timely fee and expense information, while providing the plan administrators flexibility to provide the participants information on a timely basis. 

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Topics: Benefit Plan Advising & Auditing

Carlo Berlingieri

Carlo Berlingieri

Carlo Berlingieri, with over 20 years of experience, is a Vice President in the Assurance and Employee Benefit Plan Groups.