Under the Department of Labor’s 2012 final rule to improve transparency of fees and expenses to workers in 401(k)-type retirement plans, there are three categories of plan-related information that must be disclosed. These forms of information must be given to participants on or before the date they can first direct their investments, and then again annually thereafter.
General plan information, which consists of information about the structure and mechanics of the plan, such as:
- an explanation of how to give investment instructions under the plan;
- a current list of the plan’s investment options; and
- a description of any “brokerage windows” or similar arrangement that enables the selection of investments beyond those designated by the plan.
Administrative expenses information, which is an explanation of any fees and expenses for general plan administrative services that may be charged to or deducted from all individual accounts. Examples include fees and expenses for legal, accounting, and recordkeeping services.
Individual expenses information, which is an explanation of any fees and expenses that may be charged to or deducted from the individual account of a specific participant or beneficiary based on the actions taken by that person. Examples include fees and expenses for plan loans and for processing qualified domestic relations orders.
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 NTSA Advisor that you would like to contribute or suggest, please contact John Iekel, editor of the NTSA Advisor, at [email protected]
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