On March 18, 2015, the DOL issued a final rule that amends a disclosure requirement in the participant-level fee disclosure regulations under ERISA Section 404(a) (29 U.S.C. § 1104(a)) to provide plan administrators with an additional two months to provide the annual disclosure (80 Fed. Reg. 14301 (March 19, 2015)).

The fee disclosure regulations require plan administrators to disclose plan and investment-related information to participants both:

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

Under the current regulation, "at least annually thereafter" means at least once in any 12-month period (29 C.F.R. § 2550.404a-5(h)(1)). In Field Assistance Bulletin 2013-02, issued July 22, 2013, the DOL clarified that the regulation requires annual disclosures to be made no more than one year exactly (that is, 365 days) after the prior annual disclosures (see Legal Update, DOL Issues FAB 2013-02 Extending Deadline for Sending 2013 and 2014 Comparative Charts).

The final rule amends this regulation by defining "at least annually thereafter" as at least once in a 14-month period. The DOL has added this two month buffer to give plan administrators more flexibility in complying with the disclosure requirements for common situations (such as consolidating annual disclosures with other participant disclosures or coordinating these disclosures with a change in annual enrollment periods or recordkeepers).

In the preamble to the final rule, the DOL also requests comments on whether a similar extension is needed for the "at least quarterly" definition in 29 C.F.R. Section 2550.404a-5(h)(2). This section applies to disclosures explaining administrative and individual expenses "actually charged" to individual accounts (see Practice Note, Fee and Investment Disclosure Requirements for Participant-Directed Plans: Initial Quarterly Disclosures).

Plan administrators may rely on the new 14-month requirement before June 17, 2015, the effective date of the final rule, if they reasonably determine that doing so will benefit plan participants and beneficiaries. This temporary enforcement policy is intended to help plan administrators whose disclosures may be due before the effective date of the final rule.

The DOL also released a proposed rule that amends the annual timing requirement in the same way as the final rule (80 Fed. Reg. 14334 (March 19, 2015)). If the DOL receives no significant adverse comment on the final rule, it will take effect and the DOL will not take further action on the proposed rule. If the DOL receives significant adverse comment, it will withdraw the final rule and address all public comments in a new final rule that is based on the proposed rule.

The final rule provides a minor but important change in the participant-level fee disclosure regulations. Plan administrators of participant-directed defined contribution plans should consider whether it makes sense to adjust the timing of their plan's next required annual fee disclosure in light of this guidance and depending on:

Plans can rely on the new 14-month requirement even if their annual fee disclosure is due before the effective date of the final rule.