Home / Articles / Participant-directed individual account plans: EBSA updates timing of investment disclosure

Participant-directed individual account plans: EBSA updates timing of investment disclosure

December 3, 2013

Share:

Does your qualified retirement plan have participant-directed individual account plans? If so, an Employee Benefits Security Administration (EBSA) regulation requires plan administrators to disclose detailed investment-related information to participants and beneficiaries about the plan’s designated investment alternatives. Recently, EBSA changed the timing of these notices.

Out with the old … in with the new

Originally, covered plans operating on a calendar-year basis had to furnish a comparative chart of the investment alternatives for the first time no later than Aug. 30, 2012, and then at least annually. This timing requirement was intended to ensure that participants and beneficiaries receive consistent and regular information about their plan’s investment alternatives.

Under the EBSA bulletin, a plan administrator can now furnish the 2013 comparative chart no later than 18 months after the 2012 comparative chart was furnished. For example, if a plan administrator furnished the first comparative chart on Aug. 25, 2012, the 2013 chart was due no later than Aug. 25, 2013. However, plan administrators now have until Feb. 25, 2014, to furnish the 2013 chart.

Some plan administrators may have already furnished the 2013 chart, while others incurred administrative costs to furnish their 2013 chart by Aug. 30, 2013. If so, you can furnish the 2014 comparative chart no later than 18 months after furnishing the 2013 comparative chart. For example, if you furnished the first chart on Aug. 25, 2012, and the second chart on Aug. 25, 2013, the 2014 chart was due by Aug. 25, 2014. Now, the plan administrator has until Feb. 25, 2015 to furnish the 2014 chart. This gives all plan administrators the same opportunity for a one-time “reset” of the timing for the annual comparative chart.

Timing’s not everything

EBSA, as an enforcement matter, will treat a plan administrator as satisfying the “at least annually thereafter” requirement if the plan administrator complies with the bulletin, and reasonably determines that doing so benefits participants and beneficiaries. However, the bulletin doesn’t relieve plan administrators from other obligations under the regulation. Plans still must timely disclose any changes to the plan’s investment instruction procedures or designated investment alternatives to participants and beneficiaries. Further, don’t forget to update investment-related information you have available on the Internet.
For more information please contact QPAC at [email protected]

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

Related Articles

Article

2 Min Read

Proposed regulations for inherited IRAs bring unwelcome surprises

Article

2 Min Read

Time to Increase Your Internal Audit Awareness

Article

2 Min Read

Preparing for New Employee Benefit Plans Audit Standard

Article

2 Min Read

New Audit Standard for Employee Benefit Plans: What You Need to Know

Article

2 Min Read

Top Ten Strategies for End of Year Planning

Article

2 Min Read

IRS announces adjustments to key retirement plan limits

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.
  • Hidden
  • This field is for validation purposes and should be left unchanged.