A quick, January reminder that administrators of defined contribution plans are held to new transparency regulations in 2012, and that you have just a few months to change the way you handle such matters.
Background from law firm Patterson Belknap:
“The U.S. Department of Labor (“DOL”) has long been concerned about transparency regarding fees and expenses for participants in defined contribution retirement plans (e.g., 401(k) plans, 40 (b) plans, profit sharing plans, money purchase plans) as part of its focus on ensuring that workers have access to the information they need to meaningfully compare the investment options under their employer-sponsored retirement plans and make informed decisions about how to manage and invest their retirement plan accounts. The DOL has made this concern one of its priorities over the last few years, culminating in final regulations (the “Final Regulations”) requiring plan administrators of participant-directed defined contribution retirement plans that are covered by the Employee Retirement Income Security Act (“ERISA”) to disclose certain plan and investment-related information, including fee, expense and investment performance information, to participants and beneficiaries. These new rules will generally apply as early as May 31, 2012.
Plan administrators of the impacted retirement plans and their service providers need to take prompt action to prepare for implementation of these new requirements, as they are tedious and detailed and will potentially require significant changes to current procedures and practices…”
Read the entire advisory here: Action Item for Defined Contribution Plans: New Disclosures to Participants Required in 2012
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