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EBSA Announces Opportunity to Reset Timing of Annual Participant Disclosure Regarding Plan Investmen

By Angie Brick and Michael Joyce

Employers sponsoring 401(k) plans and other qualified retirement plans with participant-directed investments must distribute an annual notice to participants disclosing comparative information regarding plan investment alternatives. The deadline to distribute the first notice was August 30, 2012, with subsequent notices due within one year of the 2012 distribution date. For example, if an employer distributed the notice last year on August 25, 2012, then the current notice would be distributed by August 25, 2013.

This week, however, the Employee Benefits Security Administration of the Department of Labor announced in Field Assistance Bulletin 2013-02 (http://www.dol.gov/ebsa/regs/fab2013-2.html) that plan sponsors will have a one-time opportunity to reset the annual delivery schedule of this notice by up to six months later. This will allow plan sponsors to align distribution of the notice with other annual participant disclosures. Specifically, the current notice may be distributed by a date up to 18 months after delivery of the 2012 notice and by that date annually thereafter.

For example, if an employer typically distributes other retirement plan materials in November, such as benefit statements, it may include the investment disclosure with those other documents this November. Then later distributions of the notice will be tied to the date of distribution of the current notice, with the next one due in this example by November of 2014. The delayed distribution could potentially occur as late as February of 2014 depending on when the notice was furnished in 2012.

If the plan sponsor has already furnished the current disclosure due to participants in 2013 (or taken the steps to do so where it does not want to delay distribution), the plan sponsor may delay the disclosure due in 2014. If this option is taken, then the 2014 notice may be distributed by a date up to 18 months after delivery of the notice in 2013 (potentially as late as February 2015), with subsequent notices distributed by that date annually thereafter.

Plan sponsors should consider this opportunity to consolidate distribution of the participant investment disclosure with other annual plan disclosures. For additional information, please contact Michael Joyce or Angie Brick of the Employee Benefits practice group.



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