Fee Disclosures – continued…

Valuable Information on 401ks, Pensions, ESOPs, Form 5500 Preparation + More

Remember the fee disclosure requirements that are coming soon…… well if done right, you can do this electronically.  The Department of Labor released technical release 2011-03 Interim Policy on Electronic Disclosure under 29 CFR 2550.404A-5.  This interim policy provides a safe harbor for electronic delivery of these disclosures and a means to set standards for electronic communication.  However, be sure that participants that receive the information meet the following requirements:

1. As to active participants, it applies if they have the ability to access documents furnished in electronic form from any location where the participant is reasonably expected to perform his or her duties as an employee and with respect to whom access to the employer’s electronic information system is an integral part of those duties (most likely a work terminal)

2. For participants who don’t meet the requirements of option 1, like retirees, former employees or active employees who don’t have regular computer access through their normal job functions, they can receive the information electronically if they “affirmatively consent” to receiving disclosures through electronic media in the manner prescribed by the regulation.  Note that the form of the affirmative consent remains undefined.

So if you choose to disclose fees electronically, make sure you are complying with the safe harbor rules.   If you don’t you may be in violation of the fee disclosure rules.  For further information, refer to www.dol.gov/EBSA/pdf/tr11-03.pdf.

By Christine Brueser, CPA