The U.S. Department of Labor’s Employee Benefits Security Administration announced issuance of a final rule requiring disclosure of fees and expenses associated with management of their 401(k)-type retirement plans. Under the rule, workers will receive this information in a format that enables them to meaningfully compare the investment options under their plans.
The final regulation requires plan fiduciaries to:
- Give workers quarterly statements of plan fees and expenses deducted from their accounts.
- Give workers core information about investments available under their plan including the cost of these investments.
- Use standard methodologies when calculating and disclosing expense and return information to achieve uniformity across the spectrum of investments that exist in plans.
- Present the information in a format that makes it easier for workers to comparison shop among the plan's investment options.
- Give workers access to supplemental investment information in addition to the basic information required under the final rule.
The final rule requires that a plan provide the following information:
- General Plan Information
- Administrative Expenses Information
- Individual Expenses Information
- Statements of Actual Charges or Deductions
- Investment-Related Information
- Performance Data
- Benchmark Information
- Fee and Expense Information
- Internet Website Address
- Glossary
The DOL Fact sheet provides an explanation of the information contained in each of these categories as well as an explanation of how plan sponsors comply. The DOL Fact Sheet regarding compliance is available here. A copy of the rule is available here.
The DOL also prepared a Model Comparative Chart that is available by accessing the DOL website (http://www.dol.gov/ebsa/) and selecting the Model Chart Option under the title "Final Rule to Improve Transparency of Fees and Expenses to Workers in 401(k)-Type Retirement Plans."
For compliance assistance or with questions, please contact your attorney at Fox Rothschild.
