(b)lines Ask the Experts – Clarification of Dates Used for Fee Disclosure

August 6, 2013 (PLANSPONSOR (b)lines) – “In  a recent Ask the Experts column, you stated it was permissible to use investment information as of 3/31/13 for a fee disclosure provided in July of 2013, as long as  same date was used with all vendors.

However, the Q&A you cited from Field Assistance Bulletin 2012-02R clearly states that data must be used ‘as of the date of the most recently completed calendar month or quarter’. So would 3/31/2013 not be a permissible date to use, since the most recently completed calendar quarter would be 6/30/13?

Michael A. Webb, vice president of the Retirement Practice at Cammack LaRhette Consulting, answers:

Excellent question, and you make a good point. Unfortunately, the Q&A does not define the term “completed” in practical terms. For example, if the disclosure was provided on July 1, a literal reading of the phrase that you provided from the Q&A would mean that date could only be provided as of 6/30/13 (“the most recently completed calendar month or quarter”) or 12/31/12 as stated in the final rule. However, as a practical matter, all of the data needed to populate the fee disclosure would not be available from the vendor for a July 1 distribution, so thus the only option would be to provide 12/31/12 information, even if more recent information  (such as 3/31/13 information) were available.

This does not make much sense, especially in the context of the actual question of the Q&A you cite, which inquires as to whether return information that is “more recent than the end of the most recently completed calendar year” may be used, with no mention in the question of using the “most recent” data.

The Experts would agree with your assessment if more recent data than the data that was being used were available (for example, we would agree with you that 3/31/13 data could NOT be used in this context if 6/30/13 data were available), but in the plan sponsor’s scenario in question, clearly 6/30/13 data was not available from one vendor, or else it would have been used. In this context, we believe that the plan sponsor would not be restricted to using 12/31/12 data when more recent data (namely 3/31/13) is available.

Thanks for the question!


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