Category Archives: Notices

DOL Releases Final Regs Requiring Annual Fee and Expense Disclosures

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.

Convenient and Easy – DOL Provides Plan Information in an Electronic Booklet

Communicating with employees about the retirement plans available to them can be an exercise in boredom and frustration for everyone involved. The employee whose eyes are more glazed over than the donuts being served at the enrollment meeting will be the same terminated employee two year later who will fail to understand why they are not receiving the non-vested portion of their profit sharing account balance. The Dept. of Labor has a booklet posted on their website designed to cover the retirement plan comprehension gap.

With the catchy title of “What You Should Know About Your Retirement Plan“, the booklet walks the reader through some basic information about plans. Written in an easy-to-read format, each chapter contains an explanation of a plan-related subject along with action items for the employee to complete. For example, the first chapter explains what defined benefit and defined contribution plans are, provides a chart of the characteristics of both types of plans, and gives the reader the action item of obtaining a copy of the Summary Plan Description and reading it.

Another benefit of the booklet is that it is available electronically, and can be easily posted on a company’s intranet using a link to the DOL’s webpage which contains the booklet.

[tags]Pension Protection Act, ppa, DOL, communication, booklet, ERISA[/tags]

2007 Letter to Pension Santa


Susan Mangiero over at Pension Risk Matters has posted a letter a pretty good letter to Pension Santa. Susan’s focus is fiduciary matters and risk, so her letter focuses on these topics.

I second Susan’s letter, and add this item to my letter to Pension Santa:

  • knowledge of, and the requisite guidance to create, any amendments required to be signed by December 31, 2008, well before that date. In a perfect world, no later than July 1st is a good date to know what must be created and signed by December 31st so plan sponsors will receive all plan document updates in one package instead of the slow trickle throughout the year which we have seen since the IRS released Rev. Proc. 2005-66;

[tags]Pension Protection Act, ppa, DOL, civil penalties, 502(c)(4), Susan Mangiero, ERISA[/tags]