US Labor Department issues guidance on retirement plan fee disclosure rules

WASHINGTON – The U.S. Department of Labor's Employee Benefits Security Administration has issued guidance meant to help plan administrators and service providers comply with the requirements of new rules improving the transparency of fees and investment expenses in retirement plans. A set of frequently asked questions and answers is published in Field Assistance Bulletin No. 2012-02.

"This guidance will help both plan administrators and covered service providers comply with their obligations under the department's new fee-transparency rules, so that workers who make their own investment decisions in retirement plans will have the information they need to make informed investment choices," said Assistant Secretary of Labor for EBSA Phyllis C. Borzi. "We also are working on a second set of frequently asked questions and answers focused more narrowly on the new rules for disclosure by covered service providers."

On October 20, 2010, the department published a final rule to help America's workers manage the money they have contributed to their 401(k) accounts, or similar retirement plan accounts, by requiring the disclosure of information regarding the fees and expenses associated with their plans. This participant-level disclosure rule, under section 404(a) of the Employee Retirement Income Security Act of 1974 (ERISA), also ensures that workers receive core investment information in a format that enables them to meaningfully compare their plan's investment options.

A second and related fee transparency rule requires, in part, that certain covered service providers furnish specified information to plan administrators so that they in turn can comply with their disclosure obligations to participants. This second rule, published by the department on February 3, 2012, under section 408(b)(2) of ERISA, requires disclosures to employers sponsoring pension and 401(k) plans about the administrative and investment costs associated with providing such plans to their workers.

The guidance responds to frequently asked questions about these rules and is intended to assist covered service providers and plan administrators with implementation. To view Field Assistance Bulletin No. 2012-02, please visit http://www.dol.gov/ebsa/regs/fab2012-2.html.

U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.