ERISA Tips: Disclosing Investment-Related Information to Participants

ERISA requires a variety of disclosures to plan participants. This installment of ERISA Tips focuses on disclosures of investment-related information.
In “The Fiduciary Duty of Participant Disclosures,”  a paper by Thorp Reed & Armstrong, Kevin A. Wiggins notes that plan administrators are required to disclose information related to how plan funds are invested. This, he says, involves information that must be disclosed:

• automatically in a comparative chart;
• subsequent to investment; and
• upon request.

Comparative Chart

The following information must provided in a chart or similar format that will allow comparison of such information for each designated investment alternative available under the plan. It also must prominently display the date. This includes:

• identifying information;
• performance data;
• benchmarks;
• fee and expense information;
• an Internet website address;
• a glossary;
• annuity information (if applicable);
• the name, address, and telephone number of the plan administrator (or a party the administrator designates to act on its behalf) to be contacted for information that must be provided upon request;
• a statement that additional investment-related information is available at the applicable web addresses described in; and
• a statement explaining how to request and obtain paper copies of the information required to be made available on a website at no charge.

Investment-Related Information Provided After Investment

After an investment is made, a plan administrator must provide each investing participant and beneficiary any materials the plan receives relating to voting, tender or similar rights related to the investment, to the extent the plan terms extend such rights to participants or beneficiaries.

Information Provided Upon Request

If asked to, a plan administrator must provide each investing participant and beneficiary the following information relating to designated investment alternatives:

• copies of prospectuses;
• copies of any financial statements or reports, such as statements of additional information and shareholder reports, and of any other similar materials relating to the plan’s designated investment alternatives, to the extent the plan terms call for such a disclosure;
• a statement of the value of a share or unit of each designated investment alternative as well as the date of the valuation; and
• a list of the assets comprising the portfolio of each designated investment alternative which constitute plan assets under the ERISA plan asset regulations and the value of each such asset or the proportion of the investment it comprises.

Editor’s Note: ERISA Tips is a feature provided with you in mind — to make the newsletter more useful to you! If you have any content for ERISA Tips or the 403(b) Advisor that you would like to contribute or suggest, please contact John Iekel, editor of the 403(b) Advisor, at [email protected].