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DOL Clarifies Interim Policy on Electronic Disclosure of Participant-directed Plan Fee Information
Practical Law Legal Update 1-516-1488 (Approx. 4 pages)
DOL Clarifies Interim Policy on Electronic Disclosure of Participant-directed Plan Fee Information
by PLC Employee Benefits & Executive Compensation
| Published on 09 Dec 2011 • USA (National/Federal) |
On December 8, 2011, the DOL issued Technical Release 2011-03R, which clarifies DOL interim guidance permitting administrators of participant-directed defined contribution plans under ERISA to electronically disclose required information regarding plan fees and expenses. The guidance confirms that certain disclosures can be made through a secure continuous access website and that investment-related information can be included in the pension benefit disclosure.
Technical Release 2011-03
As we described in a recent PLC legal update, on September 13, 2011, the DOL issued Technical Release 2011-03, which set out an interim policy allowing administrators of participant-directed defined contribution ERISA plans to electronically submit required information regarding plan fees and expenses under the final participant disclosure regulations (see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans).
When the final participant disclosure regulations were published in October 2010, the DOL did not specify whether and how these disclosures can be made to participants electronically. Instead, the DOL reserved that provision for future deliberations in light of broader issues raised by electronic disclosures under Title I of ERISA. The DOL is currently reviewing public comments on the matter.
In light of the upcoming effective date of the regulations, which require disclosures to be made to participants in calendar-year plans by May 31, 2012, the DOL recognized that some form of interim relief is necessary. Technical Release 2011-03 explained that the required participant fee and expense disclosures that are not permitted to be included in pension benefit statements, such as investment-related information, can be furnished electronically, but only by complying with either:
- The DOL's existing safe harbor rule for electronic disclosures generally (see Practice Note, Complying with the DOL Safe Harbor for Electronic Disclosure of Plan Information).
- An interim procedure set out in the Technical Release (see Legal Update, EBSA Interim Policy Allows Electronic Disclosure of Participant-directed Plan Fee Information).
For more information on the investment-related information required to be disclosed, see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans: Annual Disclosures: Investment-related Information.
Technical Release 2011-03R
On December 8, 2011, the DOL revised and reissued Technical Release 2011-03 as Technical Release 2011-03R. The revised document is identical to the original technical release, except that the following two points were clarified:
- The new guidance provides that the electronic disclosures made according to the interim procedure can be made through secure continuous access websites.
- Investment-related information, including the chart required under 29 C.F.R. § 2550.404a-5(d), may be furnished as part of, or along with, pension benefit statement information, either:
- electronically, as allowed by Technical Release 2011-03R; or
- on paper, as allowed by 29 C.F.R. § 2520.104b-1(b).
Other than these two points, Technical Release 2011-03R is identical to the prior guidance. For a more detailed description of the prior guidance, see Legal Update, EBSA Interim Policy Allows Electronic Disclosure of Participant-directed Plan Fee Information.