Department of Labor Further Delays Fee Disclosure Regulations
by Lori L. Scott, CPA, Senior Manager
September 15, 2011
On July 15, 2011, the Employee Benefits Security Administration of the Department of Labor (DOL) extended the deadlines for two major rules affecting retirement plans: the service provider fee disclosure regulation and the participant fee disclosure regulation.
Service Provider Fee Disclosure Regulation
Under this regulation, retirement plan service providers must disclose information about their compensation and potential conflicts of interest to plan fiduciaries to assist the fiduciaries in assessing the reasonableness of provider contracts or arrangements.
The newly amended rule extends the effective date of the service provider fee regulation to April 1, 2012. The DOL maintains that the extension should give service providers and fiduciaries adequate time to adjust to any changes in the final regulations, which the DOL intends to publish before the end of the year.
As a result of this change, service providers:
- Must provide initial disclosures on or before April 1, 2012,
- Need not give initial disclosures before that date, and
- Must provide initial disclosures with regard to an arrangement with a plan entered into, extended or renewed after April 1, 2012, within a reasonable time prior to entering into, extending or renewing the arrangement.
Participant Fee Disclosure Regulation
Under this regulation, plan fiduciaries are required to provide participants with plan- and investment-related information about fees and expenses. Refer to our related Lindquist Solutions article from March 2011 for additional information.
The final rules apply for plan years beginning on or after November 1, 2011. The newly amended rules delay the deadline for plans to provide the initial annual and quarterly disclosures under those rules. The deadline for the plan administrator to provide the annual plan and investment disclosures to participants in now 60 days after the later of:
- The effective date of the service provider fee disclosure regulations (i.e., April 1, 2012), or
- The date the regulations apply.
|
Plan Year-End |
Effective Date for Service Provider Fee Disclosures |
Effective Date for Participant Fee Disclosures |
Effective Date for Quarterly Expense Disclosures |
|
December 31, 2011 |
April 1, 2012 |
May 31, 2012 |
August 14, 2012 |
|
March 31, 2012 |
April 1, 2012 |
May 31, 2012 |
August 14, 2012 |
|
June 30, 2012 |
July 1, 2012 |
August 31, 2012 |
November 14, 2012 |
|
September 30, 2012 |
October 1, 2012 |
November 30, 2012 |
November 14, 2013 |
Lori Scott, CPA, is a senior manager in Lindquist LLP’s San Ramon office. She provides audit services to 30 employee benefit plans with 400 to 27,000 participants and $2.2 million to $1.6 billion in total assets. She is a member of the American Institute of Certified Public Accountants, the California Society of Certified Public Accountants and the International Foundation of Employee Benefit Plans. Contact her at (925) 277-9100 or lscott@lindquistcpa.com with questions.
Download this article
Our firm provides the information in this e-newsletter for general guidance only. It does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.