“One of our vendors wishes to provide information for the disclosure as of the close of the most recent quarter (6/30/13), but our other vendor is unable to comply with that request; the latest information it can provide is as of 3/31/2013. Can I provide data as of one date for one vendor, and as of a different date for the other?”
Michael A. Webb, Vice President, Retirement Plan Services, Cammack LaRhette Consulting, answers:
Your question is quite timely, since many plan sponsors are in the midst of preparing their annual participant fee disclosures as required under the Employee Retirement Income Security Act (ERISA) 404(a)(5). Specifically, such a disclosure is required to be distributed to all plan participants every 12 months. Since the initial fee disclosure deadline was 8/30/12, if a plan sponsor provided its disclosure precisely on the deadline date last year, it would need to provide another fee disclosure by 8/30/13, and every 12 months thereafter (if the disclosure was provided earlier than 8/30/12, the deadline would be 12 months from the date the prior disclosure was provided).However, a U.S. Department of Labor temporary enforcement policy issued July 22, allows retirement plan sponsors to reset their annual due date for providing the investment comparative chart (see “Plan Sponsors Can Reset Disclosure Date”).
The final rule indicates that data for fee disclosure should be provided for the periods "ending on the date of the most recently completed calendar year". Thus, it would appear that all data must be provided as of 12/31/2012 for the fee disclosures distributed in 2013. However, in Field Assistance Bulletin 2012-02R, Q&A 23 provided an exception to the final rule, as follows:
Q23: For designated investment alternatives with variable rates of return, may a plan administrator furnish on the comparative chart average annual total return information that is more recent than the end of the most recently completed calendar year?
A23: Yes. The Department would consider a plan to be in compliance with paragraph (d)(1)(ii)(A) of the regulation if the plan administrator furnished the average annual total return of each designated investment alternative with variable rates of return for 1-, 5- and 10-year periods (or for the life of the alternative, if shorter) as of the date of the most recently completed calendar month or quarter. However, to ensure appropriate comparability, the same ending date for a particular period ordinarily would have to be used for all designated investment alternatives under the plan, and the associated benchmark information would have to correspond to the same time period.
Thus, data may be provided as of a more recent date than 12/30/12 for the fee disclosure due in 2013, but if data is provided for one vendor as of 3/31/13, data for the other vendor MUST be provided as of the same date. So the scenario you outline would NOT be permissible, due to this subtle difference between the final rule and the Field Assistance Bulletin.
NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.