On December 19, 2011, the SPARK Institute and the Investment Company Institute released a sample glossary of investment-related terms that may help defined contribution plans comply with DOL disclosure requirements. The sample glossary, which provides definitions for over 170 terms, was developed in response to recent DOL regulations requiring participant-directed defined contribution plans to disclose certain investment-related information to retirement plan participants.

The required glossary of investment-related terms, intended to help participants and beneficiaries understand their investment options, is part of a longer list of investment-related information which must be disclosed annually to plan participants in the form of a comparative chart. The glossary may be included within the chart itself or may be made available at an internet web address listed in the chart. The DOL has released a model chart to assist plans in providing the required information.

The new sample glossary is divided into two parts. The first contains over 150 general investment-related terms, while the second defines an additional 16 terms specific to insurance products. The glossary terms may be customized or modified by users.

The glossary has been endorsed by the American Benefits Council, American Council of Life Insurers, American Society of Pension Professionals & Actuaries and the Society for Human Resource Management, but has not been reviewed or approved by any government agency.

The first annual disclosures of investment-related information in the form required by DOL regulations are expected to occur in the spring of 2012.

For additional information on the participant disclosure requirements, see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans.