Snapshot
In ErisaALERT 2011-13, we discussed Technical Release 2011-03, an interim enforcement policy regarding electronic delivery of the required participant disclosures until further guidance becomes available. Technical Release was intended to provide guidance related to DOL regulations issued in October 2010 regarding disclosures for participant directed accounts.
The participant disclosures are plan related and investment related with each category requiring certain expense related disclosures. Certain participant disclosures can be provided in the summary plan description and/or the pension benefit statement and certain investment related participant disclosures must be provided separately. The amended effective date of the initial participant disclosure is generally May 31, 2012.
The required participant disclosures which are permitted to be provided in a pension benefit statement (e.g., plan administrative fees, QDRO fees, and loan fees) may be furnished in the same manner as the participant benefit statement as provided under FAB 2006-03.
The required participant disclosures which are not permitted to be provided in a pension benefit statement (e.g., performance data, investment category, certain fee and expense information, glossary of investment terms) may be provided under the existing DOL safe harbor for electronic disclosure or in accordance with the requirements of the Technical Release.
EBSA received a number of inquiries regarding whether Technical Release 2011-03 was intended to apply to continuous access websites and under what circumstances required investment-related information could be provided as part of a pension benefit statement.
On December 8, 2011 EBSA released Technical Release 2011-03R as well as a News Release. Technical Release 2011-03R is identical to Technical Release 2011-03 except to clarify that:
- continuous access websites are permissible if the plan administrator complies with the conditions in the technical release; and
- Investment-related information under DOL regulation 2550.404a-5(d) of the participant-level fee disclosure regulation may be furnished as part of, or along with, a pension benefit statement, either electronically under the conditions in the technical release or in paper form.
Technical Release 2011-03 could be interpreted to prohibit the above two points.
What should plan sponsors do?
- Understand the participant disclosure rules and what can be disclosed where, i.e. summary plan description, pension benefit statement or separate disclosure.
- Understand how and what information you currently disclose and perform a gap analysis.
- Talk to your service providers regarding what information they will provide and how.
You may want to check our new blog periodically for quick updates on compliance issues.
Note: all links are active as of the date of issuance of this ErisaALERT.
Disclaimer: This material is for the sole purpose of providing general information and does not under any circumstances constitute legal advice and should not be used as a substitute for legal advice. You should seek the advice of counsel when applying the requirements to your plan. For more information on this ErisaALERT contact us by phone at 610-524-5351 and ask for Mary Andersen or 973-994-7539 and ask for Theresa Borzelli.
