The DOL’s Employee Benefits Security Administration (EBSA) has issued a final rule (pdf) that extends the compliance dates for two of its rules related to retirement plan fee disclosures. Specifically, the final rule pushes back the applicability date of the fiduciary-level fee disclosure rule issued on July 16, 2010 until April 1, 2012. This rule sets forth enhanced disclosures that certain pension plan service providers must give to plan fiduciaries as part of a “reasonable” contract or arrangement for services under section 408(b)(2) of ERISA.

In addition, the final rule modifies the transition provision included in the participant-level fee disclosure regulation issued on October 20, 2010. This rule requires retirement plan sponsors and fiduciaries to disclose certain plan and investment-related information, including that related to fees and expenses, to participants and beneficiaries in participant-directed individual account plans, such as 401(k)s. These disclosure requirements apply to plan years beginning on or after November 1, 2011, but contain a transitional rule for providing disclosures required on or before the date on which a participant or beneficiary can first direct his or her investment. The final rule amends this disclosure period to require that initial disclosures be provided no later than 60 days after the first day of the first plan year beginning on or after November 1, 2011, or 60 days after the effective date of the fiduciary-level fee disclosure rule, whichever date is later. Finally, the EBSA has also revised the transition rule to provide guidance on when certain quarterly disclosures must be furnished. Under the final rule, these disclosures “must be furnished no later than 45 days after the end of the quarter in which the initial disclosures are required to be furnished to participants and beneficiaries pursuant to the transitional rule.” According to the EBSA, linking the applicability dates of these two rules will ensure that the fiduciary-level fee disclosure rule becomes effective first and that all plans will be able to take advantage of the transition provision included in the participant-level fee disclosure rule.

In a statement, EBSA Assistant Secretary Phyllis C. Borzi said: “Extending and aligning the applicability dates of these related rules gives plan fiduciaries an appropriate amount of time to get all required fee and investment information from their covered service providers so they can then disclose, by the date required, complete and accurate information about retirement plan and investment costs to their workers.”

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