The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) announced a direct final rule that provides a two-month grace period for participant-directed individual account plans, such as 401(k)s, to provide annual investment and plan-related information to participants.
According to EBSA, the rule changes the requirement that annual disclosures be made at least once in any 12-month period to at least once in any 14-month period.
“The additional two months provided by the rule are in response to comments received by the department that plan administrators need more flexibility for these annual disclosures to avoid potentially unnecessary costs and burdens,” EBSA explains. “The information that is currently required to be disclosed, which helps workers make informed plan and investment decisions about their retirement savings, remains unchanged.”
The direct final rule is accompanied by a notice of proposed rulemaking. If EBSA receives significant adverse comment during the public comment period, it says it will withdraw the direct final rule and then address the comments in a subsequent final rule. The direct final rule is otherwise effective on June 17, 2015.
The DOL also announced a temporary enforcement policy that is “effective immediately and generally will apply until the direct final rule takes effect.”
“EBSA, as an enforcement matter, will treat a plan administrator as satisfying the current 12-month rule if annual disclosures are made within the new 14-month deadline, provided that the plan administrator reasonably determines that doing so benefits the plan’s participants and beneficiaries,” EBSA says.
The proposed rule will be published in the March 19, 2015, edition of the Federal Register. EBSA is soliciting comments on the rule which are due 30 days from the date of publication.