Retirement Plans – Participant Fee Disclosure Regulations

If your company sponsors a defined contribution retirement plan subject to ERISA (including a 401k plan) and plan participants have the ability to choose among investment options in their account, there are new disclosures you need to make to those participants starting in 2012.

Levin, Swedler & Company is an AICPA – Employee Benefit Plan Audit Quality Center Member

On October 20, 2010, the U.S. Department of Labor published final regulations known as the Participant Fee Disclosure Regulations.  These regulations are intended to ensure that participants with self-directed accounts are aware of their rights and responsibilities in managing their accounts and are provided sufficient information regarding the investment options available to them and the related fees and expenses.

The initial disclosure of general plan information must be made by May 31, 2012 (for calendar year plans); similar notices must then be provided annually thereafter.  In addition to the required annual disclosures, information must be furnished to participants on a quarterly basis regarding administrative and individual fees and expenses actually charged to their account for the preceding quarter, as well as the services and transactions to which those fees relate.  The initial deadline for these newly required quarterly disclosures is August 14, 2012 (for calendar year plans).

The plan administrator has a fiduciary duty to ensure that these disclosures are timely.  However, the plan administrator may rely reasonably and in good faith on information received from the plan’s investment advisor or other service providers.  If you are a plan administrator and have not yet heard from your investment advisor or other service providers about how they plan to assist your plan in satisfying the new regulations, we recommend you contact those service providers before the end of 2011.

Please contact Levin Swedler & Company -Certified Public Accountants if you need further assistance with these new disclosure requirements or any of the numerous other plan disclosures required by the DOL or IRS.

Written by: Todd M. Kennedy, CPA


About akroncpa

Levin Swedler Kennedy is an Akron, Ohio CPA Firm, offering business and not-for-profit consulting, financial statement preparation, tax preparation & planning, QuickBooks & Peachtree support, auditing, and business valuations since 1986.
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