We recently posted an explanation of the DOL extension to provide annual participant disclosures under regulation 404a-5. Since then we have received many questions relating to service provider fee disclosures under regulation 408b-2. There is no extension for the service provider disclosures. A few FAQs should clarify this point.
Who is responsible to make 408b-2 service provider disclosures?
A covered service provider makes the disclosures to a responsible plan fiduciary.
What is the deadline to provide 408b-2 disclosures?
The covered service provider must make the so-called “initial disclosures” reasonably in advance of the date the contract or arrangement is entered into, extended, or renewed.
Are there annual 408b-2 disclosures?
For most service providers, no, unless the service provider modifies or extends the contract with the plan every year. For example, suppose a recordkeeper has a five-year contract to provide services to a plan. The recordkeeper would make the initial disclosures a reasonable time before entering into the contract, and unless there are modifications, would not make the disclosures again until the contract is renewed at the end of five years.
Certain covered service providers, such as platform recordkeepers, are required to provide, as part of the initial disclosures, essentially all of the information that the plan administrator must deliver to participants on the comparative chart, included as part of the 404a-5 regulations. If that information changes (as it surely does), then the service provider must update that information “at least annually.” However, service providers not involved with investments or investment platforms do not have an obligation to provide this information.
Does the extension to provide participant disclosures under 404a-5 affect service provider disclosures under 408b-2?
No. Covered service providers must still make initial disclosures a reasonable time before entering into, extending, or renewing an arrangement with a plan. Service providers who are required to provide investment information as a part of those disclosures must still update that information for changes at least annually. The DOL has not modified either of those deadlines.
Then what deadline did the DOL extend?
The DOL extended the deadline for plan administrators of participant-directed defined contribution plans to provide annual disclosures to the participants. For further information, see our Technical Update from July 24th.
We will further discuss this topic at our Advanced Pension Conference, August 28-30. See below for details.
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Upcoming Web Seminars
Distribution and Taxation: Navigating the Maze, July 30, 12:00 p.m. ET
Coverage and Nondiscrimination Testing for Related Employers, August 1, 2:00 p.m. ET
Practical Guide to Plan Fee Disclosures - 3 parts, August 6-7-8, 2:00 p.m. ET
ERISA Recapture Accounts: Understanding How ERISA Applies, August 14, 2:00 p.m. ET
457(b) Plans for 401(k) Practitioners, August 15, 2:00 p.m. ET
Safe Harbor 401(k) Plans 2013 - 3 parts, August 20-21-22, 12:00 p.m. ET
For program details about upcoming Web seminars, and to register online: http://www.relius.net/events/events.aspx?Web
Chicago Advanced Pension Conference – August 28-30 – Early Fee Extended to July 29
New this year – 75% more breakout sessions and topics; deeper registration discounts; experience Chicago on us - free Navy Pier’s Ferris wheel ride and Food Court voucher. Topics on the agenda include: tax reform, EPCRS 2013, pre-approved 403(b) plans, E&O coverage, component plan testing, 457 plans, disqualification, ERISA recapture accounts, early eligibility, TPA contracts, and more. Earn up to 19 hours of CE credits. See complete program details and register online on our Web site: http://www.relius.net/Events/seminardetail.aspx?CID=26172
Just for ERPAs Workshop – Chicago, August 27 – Discount for APC attendees
Scheduled on Tuesday, August 27, the day before the APC, this workshop covers prohibited transactions, details on 5330, what we are seeing in DOL and IRS audits, doctor plans, ethics, and more. Earn up to 8 hours of ERPA credit, including 2 ethics hours. Register for both the Chicago APC and the ERPA Workshop, and pay only $250 for the Workshop, a savings of $160. See details and register online on our Web site: www.relius.net/Events/seminardetail.aspx?EID=26300
Advanced Cross-Tested Plans: Adding More Tools – 12 cities, September - October
Restructuring, Age/Service Schedules, Banding, Family Members, and More
Cross-tested profit-sharing and 401(k) plans are among the most popular plan designs today. They can aid a practitioner in tailoring a plan for the needs of a business and its workforce. But cross-testing is not a “one size fits all” design. There are many approaches to a cross-tested plan, with very different outcomes. And unless a practitioner understands all the tools available for the plan, the practitioner may well provide a plan that is less effective or more costly than it could or should be. SunGard’s new Advanced Cross-Tested Plans Workshop adds to the tools practitioners have available to assist their clients. Now open for online registration. See program details here: www.relius.net/events/events.aspx?Seminar
401(k) Plans: Beyond the Basics – 6 Cities, September - October
This practical, intermediate course will help enhance your 401(k) knowledge and update you on the most recent 401(k) plan guidance. Incorporating recent law changes, the program extends beyond the basics to cover special 401(k) testing rules and design options. Over the two days, we consider many issues and problem areas for which experienced 401(k) practitioners need to be prepared. Earn up to 13 hours of CE credits. Open for registration now. See details and register here: www.relius.net/events/events.aspx?Seminar
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