Today, the DOL released the Final Regulations on Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans. The regs are 142-pages long and are effective on December 20, 2010. More importantly, they are applicable to covered individual account plans for plan years beginning on or after November 1, 2011. For calendar year plans, this means that the new regs are applicable for plan years beginning on January 1, 2012.
Despite receiving a relatively large number of comments, the DOL states that they will not be exempting small plans (less than 100 participants) from complying with these regulations.
The regulations require that plan administrators provide participants and beneficiaries with certain information before they can first direct their investments, and then the plan administrator must continue to provide this information on an annual basis. The required information includes a current list of the plan’s investment options and explanations of fees and expenses for general plan administrative services that may be charged or deducted from all individual accounts, such as legal, accounting and recordkeeping services provided to the plan in general, along with an explanation of fees and expenses charged to individual accounts based on actions taken by the participant or beneficiary, such as fees for plan loans or for processing a qualified domestic relations order.
The DOL also released a Model Comparative Chart which can be used to comply with the requirements in these new regulations.
