The SPARK Institute has asked the U.S. Department of Labor for an extension of the deadline when retirement plan sponsors are required to provide participant fee and investment disclosure materials to participants.
As part of the 404a-5 participant fee disclosure rules that went into effect last November, plan sponsors are required to furnish plan participants with fee disclosure information at least once a year. The SPARK Institute would like a little more leeway, say about 18 months.
"Plan sponsors are requesting that their service providers combine the 401a-5 disclosures with other plan materials, such as year-end disclosures, or provide them after the start of a new calendar year when year-end investment alternative performance and benchmark information is available," said Larry Goldbrum, general counsel for The SPARK Institute.
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In a letter to the DOL, Goldbrum said that most plan sponsors are being very cautious and because of this are interpreting the rule as meaning that they have to provide this and future years' fee disclosure information within 12 months of the prior year's disclosures, typically by Aug. 30.
"That is hindering many plan sponsors from being able to synchronize the delivery of the 404a-5 disclosures with other plan materials and adding to plan costs," he said in a statement.
The SPARK Institute asked the DOL to issue guidance that would allow good-faith compliance with the "at least annually" requirement by permitting plan sponsors to furnish the materials at any time during each calendar year, provided that the materials are furnished no more than 18 months from the date the prior year's materials were provided.
"The proposed approach will simplify and facilitate efficient compliance with the 404a-5 participant disclosure regulations,"Goldbrum said. "The 18-month compliance window will allow plan sponsors to synchronize delivery of the 404a-5 materials with other disclosures and notices, and will reduce plan costs by eliminating one or more separate mailings of the investment option comparative chart."
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