The Joint Committee on Employee Benefits (JCEB) of the American Bar Association recently issued Q&As containing nonbinding responses from the DOL to 23 questions. The Q&As, compiled by the JCEB, are based on discussions between JCEB and DOL representatives at their 2012 Joint Committee of Employee Benefits Technical Session, held on May 9, 2012. Responses to the questions are unofficial and nonbinding. Topics addressed include (but are not limited to):

The DOL explained that in a situation where employee deferrals for a pay period are deposited late to a plan's trust, and a plan sponsor wishes to self-correct the error (instead of filing through the DOL's Voluntary Fiduciary Correction Program (VFCP)), file a Form 5330 and pay excise tax, the sponsor may not use the DOL's online calculator to determine the interest owed. The DOL clarified that the Employee Benefits Security Administration (EBSA) online calculator was developed in connection with the VFCP. Although the VFCP allows for the correction of delinquent employee contributions, the VFCP does not recognize self-correction of delinquent employee deferrals and therefore the online calculator was not meant to be used in connection with the self-correction of delinquent employee deferrals.

EBSA is currently investigating expanding the VFCP to include a self-correction component for delinquent employee deferrals. However, the DOL response clarifies that, at the present time under these facts, the plan sponsor making this self-correction would not:

The DOL was asked whether a specific method for electronically delivering SPDs to participants and beneficiaries complied with the general requirements for disclosing ERISA-required plan documents under DOL Reg. § 2520.104b-1(b)(1). The question dealt with a situation where a flash drive or CD containing an electronic copy of the SPDs is sent via first class mail to participants' and beneficiaries' last-known addresses. The plan administrator includes in the mailing a written notice informing participants and beneficiaries of:

However, the participants and beneficiaries receiving the flash drive or CD did not:

The DOL responded that this delivery method did not satisfy the general standards of § 2520.104b–1. In general, the use of first class mail is considered an acceptable delivery method. In this case, however, the DOL reasoned that although participants and beneficiaries might actually receive the flash drive or CD in the mail, DOL would not consider the information to have been furnished if participants and beneficiaries are unable to read or access it. The DOL stated that it is not reasonable to assume that participants will be able to access and read the CD or flash drive merely because they are formatted "in a commonly accessible fashion", especially where the plan administrator has not determined whether participants and beneficiaries have the necessary technology and ability to do so.

Finally, the DOL considered a situation where a plan administrator wishes to change its default fund from a balanced fund invested 60% in equities and 40% in bonds (the 60/40 balance fund) to a family of target date funds. The plan administrator considers two alternatives for switching the balanced fund to the target date funds as the Qualified Default Investment Alternatives (QDIAs). The DOL staff addressed whether the two alternatives would meet the requirements of ERISA Section 404(c)(4):

The DOL responded that the neither alternative target date fund would satisfy ERISA Section 404(c)(4)(B)(ii), primarily because, by design, target date funds are expected to change risk-return characteristics over time. The DOL noted, however, that:

The DOL declined to answer several questions, including ones involving:

The agency also did not answer questions involving health and welfare plan issues, including employee assistance plans, voluntary benefits, wrap plan documentation, health savings accounts and grandfathered plan status under the Affordable Care Act (ACA).

Although the DOL did not provide answers for many of the questions presented, those questions for which the agency did provide its informal views may be instructive for plan administrators and their advisors. For example, the DOL's answer to the SPD electronic disclosure question calls into question a delivery method that may be in common use by some benefit plans. Ideally, the DOL will update its views on electronic disclosure of ERISA-required documents in future guidance.