Sponsors of 401(k) and other participant-directed defined contribution retirement plans will have more flexibility in the timing of providing annual plan and investment disclosures to participants, under a direct final rule from the Department of Labor (DOL). Instead of disclosing the required information “at least annually” which the agency had interpreted to mean no more than 365 days after the sponsor provided the prior annual disclosure, sponsors will have up to 14 months to do so. The modification will require disclosures to be made “at least once in any 14-month period, without regard to whether the plan operates on a calendar year or fiscal year basis.”
The change to the timing requirement will ease the administrative burdens faced by many plan sponsors and administrators.
The flexibility provided by the direct final rule is slated to be effective June 17, 2015, and will apply to disclosures made on or after that date, unless the DOL withdraws the rule before then due to adverse comments received.
The DOL’s direct final rule also announces an immediate, temporary enforcement policy (until June 17), so that plan sponsors and administrators may take advantage of the two-month grace period before the June 17 effective date, as long as they reasonably determine that doing so will benefit participants and beneficiaries. The relief granted by the enforcement policy is in addition to the one-time, 18-month “re-set” opportunity provided by the DOL’s Field Assistance Bulletin 2013-02.
For more information about the DOL’s direct final rule or a related proposed rule, please contact your Milliman consultant.