Reminder: Upcoming Obligations on Retirement Plan Sponsors and Administrators Regarding Fee Disclosure

June 2012

In continuing our series of Client Alerts pertaining to new requirements from the U.S. Department of Labor (“DOL”) regarding retirement plan fee disclosures, we now remind you of obligations on most retirement plan sponsors and plan administrators that will become effective as early as July 1, 2012.

As we have previously alerted you, there are two sets of final regulations from the DOL in this area that will soon become effective—(1) so-called “Service Provider Fee Disclosure Regulations,” which require certain service providers (e.g., investment advisors, recordkeepers and others1) to most retirement plans that are covered by the Employee Retirement Income Security Act (“ERISA”) to disclose their compensation and fees to retirement plan fiduciaries, and (2) so-called “Participant Fee Disclosure Regulations,” which require plan administrators of participant-directed investment defined contribution retirement plans that are covered by ERISA (e.g., most 401(k) plans and 403(b) plans) to disclose certain plan and investment-related information, including fee, expense and comparative investment performance information, to participants and beneficiaries. While it may be obvious that the Participant Fee Disclosure Regulations will require affirmative actions by plan administrators, it is important to note that the Service Provider Fee Disclosure Regulations also will require actions by responsible plan fiduciaries—i.e., those who have decision-making authority over the retirement plans.

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