Under DOL final regulations issued in 2010, administrators of 401(k) plans and other defined contribution plans with participant-directed investments must provide participants and beneficiaries with an annual fee disclosure that includes detailed plan and investment-related information. For most plans, including calendar year plans, the initial fee disclosure was due by August 30, 2012, with subsequent disclosures to be provided at least once in any 12-month period.
Plan administrators and other interested parties expressed concern that because the annual August 30 deadline does not coincide with the timing for other participant disclosures, it is not feasible to combine the distribution of the annual fee disclosure with other participant materials, thus requiring a separate mailing and associated costs. Also, some believed that the disclosure would be more effective when distributed with other plan communications or at a more relevant time, such as during enrollment periods.
In response to these concerns, the DOL issued Field Assistance Bulletin (FAB) 2013-02, which provides plan administrators with a one-time opportunity to reset the deadline for the annual fee disclosure if the plan administrator determines that doing so will benefit plan participants and beneficiaries. Under this guidance, a plan administrator will be treated as satisfying the annual notice requirement by furnishing the 2013 disclosure no later than 18 months following the date of the initial disclosure, after which the 12-month period would apply. For example, if the initial disclosure was furnished on August 25, 2012, the 2013 disclosure would be due no later than February 25, 2014. If a plan administrator chose to furnish the 2013 disclosure on December 20, 2013, then the 2014 disclosure would be due no later than December 20, 2014.
In addition, for those plan administrators who have already taken steps and incurred costs to furnish the 2013 disclosure, the one-time reset opportunity may instead be applied to the 2014 disclosure. For example, if a plan administrator has already worked on the 2013 disclosure and it is furnished on August 25, 2013, the 2014 disclosure would be due no later than February 25, 2015, and then the 12-month period would apply beginning with the 2015 disclosure.
FAB 2013-02 is welcome guidance for plan administrators who wish to distribute the annual fee disclosure with other participant materials or at a different time of the year. Although this guidance does not address concerns that plan administrators must satisfy a fixed annual deadline for the disclosure, the DOL indicated that it is considering further revising the timing requirement to permit a disclosure window (for example, distribution within a 30-45 day period) in future years.