SOURCE: www.dol.gov
Effective date of service provider fee disclosure now April 1, 2012
WASHINGTON — The U.S. Department of Labor’s Employee Benefits Security Administration has issued a final regulation under the Employee Retirement Income Security Act to extend and align the applicability dates for its retirement plan fee disclosure rules.
The department published an interim final regulation under ERISA Section 408(b)(2) on July 16, 2010, requiring covered service providers of retirement plans to disclose comprehensive information about their fees and potential conflicts of interest to ERISA-covered plan fiduciaries. This regulation was to become effective with respect to plan contracts or arrangements for services in existence on or after July 16, 2011. Today’s final rule moves the effective date to April 1, 2012.
In addition, the department published a final participant-level regulation on Oct. 20, 2010, requiring that employers disclose information about plan and investment costs to workers who direct their own investments in ERISA-covered 401(k) and other individual account retirement plans. This regulation, which applies to plan years beginning on or after Nov. 1, 2011, contained a 60-day transition rule that permitted initial compliance no later than 60 days after the beginning of the first plan year on or after Nov. 1. Today’s final rule retains a modified version of the 60-day transition rule that works in conjunction with the new effective date of the 408(b)(2) regulation. This linkage will ensure that the 408(b)(2) regulation becomes effective first and that all plans will be able to take advantage of the transition period following the effective date of the 408(b)(2) regulation.
“Employers and workers will benefit from the increased transparency provided by these fee disclosure rules,” said EBSA Assistant Secretary Phyllis C. Borzi. “Extending and aligning the applicability dates of these related rules gives plan fiduciaries an appropriate amount of time to get all required fee and investment information from their covered service providers so they can then disclose, by the date required, complete and accurate information about retirement plan and investment costs to their workers.”
Plan sponsors and service providers with questions about applicability dates or the final rule can contact Jeffrey Turner in EBSA at 202-693-8500. Additional information about these regulations is available on EBSA’s website at http://www.dol.gov/ebsa/.