June 2011 Fee Disclosure Deadline Extensions

Please feel free to launch a video review of this month’s topic or continue to read on below.

The top news this month is the official extension of the fiduciary-level and participant-level fee disclosure deadlines.

As a review, the fiduciary-level fee disclosures will be provided from your service providers to you and the participant-level disclosures are from you to your participants.

The fiduciary-level disclosures were originally due by July 16^th, 2011 but the DOL has provided an extension and you should receive your first set of fee disclosures by January 1^st, 2012.    Remember you are already required to ensure that only reasonable compensation is paid for the services provided.  Ironically, your service providers have not been required to disclose their fees to you.

The participant-level fee disclosure regulation requires you to provide an initial and recurring annual notice with a narrative explanation of the fees that may be deducted from a participant’s account and a quarterly notice which reflects the actual expenses drawn from their accounts.  It applies for plan years beginning on or after November 1, 2011 and originally included a 60 day transitional rule but the Department extended the transition to 120 days in order to align the application of these two regulations.  So calendar year plans will have to furnish the initial disclosures no later than April 30th, 2012 and the ongoing quarterly statement of fees actually paid by participants no later than May 15^th, 2012.

It is a big initiative by the Department to increase transparency so you’ll probably hear more about it as the deadline approaches.

I’ll be in Chicago next week as a panelist at the PLANSPONSOR Conference and hope to share any insights gained in next month’s newsletter.  In the meantime, I hope you enjoy the beautiful weather and have a great day.