On October 14, 2010, the Department of Labor (DOL) released a participant disclosure regulation under section 404(a) of the Employee Retirement Income Security Act of 1974 (ERISA). The regulation imposes a duty on plan administrators to provide participants and beneficiaries with certain plan information and related fees as well as information related to the plan investment options in a comparative format. By establishing a mandatory uniform set of disclosure rules, the DOL hopes to ensure that all participants have access to the information they need to make informed decisions regarding management of their plan account and investment of their retirement savings.
The final transition rule provides that the initial disclosures to participants (both existing and newly eligible) must be furnished no later than either 60 days after the plan's applicability date or 60 days after the effective date of the DOL service provider fee disclosure regulation under ERISA 408(b)(2). The rule is applicable for plan years beginning on or after November 1, 2011. By coordinating the transition rule with the 408(b)(2) effective date, the DOL intends to allow all plan fiduciaries to receive required disclosures from service providers prior to having to send notices to participants. The DOL also clarified that the first quarterly disclosures under the regulation should be provided 45 days after the quarter in which the initial disclosures have been made.