DOL Issues New Individual Account Plan Participant Fee Disclosure Rules

The Department of Labor (DOL) recently released its final fee disclosure regulation, 29 C.F.R. 2550.404a-5. The regulation is the third issuance in the DOL's ongoing effort to improve clarity with respect to fees and expenses incurred by employee benefit plans. The release also modifies existing regulations under Internal Revenue Code (Code) Section 404(c) to conform those rules to the newly adopted regulation. In general, the new regulation requires detailed advance disclosures as well as regular updates on actual expenses to participants in employee benefit plans that provide participants with investment discretion (generally 401(k) and 403(b) plans). The new regulation outlines, in detail, notice content as well as the form and timing of disclosures. The new rule takes effect for plan years beginning after November 1, 2011 — thus, January 1, 2012 for most participants.