Year = 14 Months for Rule on Participant-Level Fee Disclosure
The direct final rule that the Department of Labor (DOL) issued on March 19 containing fiduciary requirements for disclosure in participant-directed individual account plans
went into effect June 17. But the DOL has built flexibility into the rule, and has built in two additional months in which to provide the information.
Under the previous regulatory language, the DOL had interpreted the term “at least annually thereafter” meant at least once in any 12-month period, regardless of whether the plan operates on a calendar or fiscal year basis. The rule now interprets “at least annually thereafter” to mean at least once in any 14-month period, regardless of whether the plan operates on a calendar year or fiscal year basis. The DOL made this change to afford plan administrators more flexibility.
This rule itself amends the DOL’s participant-level fee disclosure regulation. It makes a technical adjustment to a timing requirement in the current regulation. As amended, the regulation provides plan administrators with flexibility regarding when they must furnish annual disclosures to participants and beneficiaries.
The overall objective of the regulation is to make sure that the information participants and beneficiaries in participant-directed individual account plans need in order to make informed decisions about the management of their individual accounts and the investment of their retirement savings is provided them on a regular and periodic basis. The DOL says that it recognizes that deadlines are necessary in order to avoid irregular and non-periodic disclosures; however, it also says that it does not consider flexible deadlines as undermining the overall objective of the regulation.