Lugar de Noticias Haynes and Boone
Final Participant Fee Disclosure Regulations
The Department of Labor (the “DOL”) published the final regulation on fee disclosures to participants and beneficiaries in participant-directed account plans (the “Regulation“). The Regulation applies to most “participant-directed individual account plans” (such as 401(k) plans), regardless of whether the plan is intended to comply with Section 404(c) of ERISA.
The Regulation is one part of a three-part set of rules intended to address fee disclosures. The first part addressed the disclosure of service provider fees on Schedule C to Form 5500, and the second part provided interim final rules regarding disclosure of fees by service providers. The Regulation represents the third part, the disclosure of fees and other information by the plan administrator to the plan’s participants and beneficiaries.
While these disclosures are fiduciary obligations of the plan administrators, they will not be liable for reasonable good faith reliance on information received from plan service providers or investment advisors. However, plan fiduciaries are still responsible for the prudent selection and monitoring of plan investment options and service providers.
The Regulation calls for two types of disclosures: (1) plan-related disclosures and (2) investment-related disclosures.
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