The Department of Labor (DOL) requires sponsors of retirement plans with participant-directed investments to provide participants with a fee disclosure “at least annually”. The DOL has recently amended DOL Reg. § 2550.404a–5 in order to change the definition of “at least annually”. This amendment applies to fee disclosures made on or after June 17, 2015.
Old Definition of “At Least Annually”
In the past, the DOL has defined “at least annually” as at least once every 365 days. For example, a fee disclosure provided on December 6th, 2014 would be considered late if the previous disclosure was provided on December 5th, 2013. In an effort to avoid this, plan administrators would provide the fee disclosure earlier and earlier each year, thus accelerating their deadline for subsequent years.
New Definition of “At Least Annually”
In response to the administrative and logistical concerns associated with the old definition, the DOL has redefined “at least annually” to mean at least once in any 14-month period. This two month grace period eliminates the accelerating deadline issue.
For more information about this amendment, click here.
For more information about the required fee disclosure, see Fee Disclosures for Plans on a Recordkeeper Platform.
If you have any questions, please feel free to contact Pinnacle Plan Design.
Pinnacle Plan Design is a third-party administrator (TPA) for employer-sponsored qualified retirement plans. We specialize in retirement plan design, administration and actuarial consulting for 401(k)/profit-sharing plans, defined benefit plans, cash balance plans, and 403(b) plans. Pinnacle Plan Design proudly serves businesses nationwide.