May 27, 2022

Volume XII, Number 147

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New Timing Rule for Annual Disclosures to Plan Participants

It took several years, but the U.S. Department of Labor (DOL) recently authorized a reasonable solution to the plan administration challenges created by its regulation that requires most participant-directed, individual account retirement plans to provide detailed plan expense and investment information to participants “at least annually.” The regulation narrowly defined that term to mean “at least once in any 12-month period.”

In 2013 DOL acknowledged operational concerns about its interpretation and allowed a one-time “reset” of the 12-month period. However, that short-term relief did little to solve the practical problems plan administrators face. It remained difficult to coordinate the annual disclosure of plan expense and investment information with other required notices, and the rule encouraged administrators to wait until the end of a 12-month period to avoid accelerating subsequent deadlines. We and others recommended more practical solutions (see our prior alert here).

The good news is that DOL recently amended its regulation, redefining “at least annually thereafter” to mean “at least once in any 14-month period.” This common sense change should provide the flexibility plan administrators need to coordinate disclosures and reduce plan expenses.

Copyright © 2022 Godfrey & Kahn S.C.National Law Review, Volume V, Number 96
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About this Author

John Donahue Tax & Employee Benefits Attorney
Shareholder

John Donahue is a shareholder in the Tax and Employee Benefits Practice Group. He works in the Milwaukee office.

John’s practice includes tax, employment and corporate law with a primary emphasis on employee benefits. He advises businesses and their owners regarding the design, installation, maintenance and termination of pension plans, 401(k) programs, employee stock ownership plans and other benefit programs. John provides guidance on the employee benefit aspects of mergers and acquisitions, and he assists clients in responding to regulatory inquiries and disputed benefit claims....

414-287-9422
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