EBSA Finishes Regulatory Package with Participant Disclosure Proposal

July 22, 2008 (PLANSPONSOR.com) - Federal regulators on Tuesday unveiled the long-awaited final portion of their three-part plan disclosures regulatory package that calls for sponsors of employee-directed plans to supply participants with basic plan information including investment returns and expenses.

The latest proposed rule from the Employee Benefits Security Administration (EBSA) mandates that required disclosures be provided generally when a participant becomes plan eligible and every year after that. Bradford P. Campbell, assistant secretary for the Labor Department's EBSA, said the latest suggested rule was designed in part to pull together in a single document data that has traditionally been separately disclosed.   

Under the proposal, the mandated disclosure is to be made in a comparative chart format. Regulators supplied a sample chart for a fictional retirement plan.

"What people want are simple, concise disclosures that aggregate plan information in useful ways," Campbell told reporters during a Tuesday conference call.   

When finalized, the regulation will be effective for plan years beginning on or after January 1, 2009, EBSA said.

The proposal requires plan fiduciaries to disclose basic information about the plan, such as:

• available investment options;
• how participants can give investment instructions;
• a description of fees and expenses charged to participants and beneficiaries for plan administrative services, such as legal, accounting, and recordkeeping charges, as well as how these charges will be allocated to their individual accounts;
• a description of fees and expenses charged to a specific participant's account based on actions taken by that participant, such as charges for processing loans, QDROs, or investment advice; and
• how to obtain more detailed information.  

In addition, plan fiduciaries must disclose to participants, on a quarterly basis, the actual dollar amount charged to the participant's account during the preceding quarter for specified administrative expenses.