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]
