Connect with us

News

New Transparency Rules in Effect for Retirement Plans

Advertisement

As of July 1, the U.S. Department of Labor will require companies that sponsor retirement plans for their workers to provide full disclosure of services and fees associated with those retirement plans.

Advertisement

The rules cover defined benefit plans and defined contribution plans including 401(k)s and 403(b)s, but not Simplified Employee Pension (SEP) plans, Savings Incentive Match Plan for Employee (SIMPLE), IRA plans or individual retirement annuities.

In an effort to increase transparency and improve understanding on the part of plan, the Labor Department said, sponsors of contracts, services, fees and potential conflicts of interest related to retirement plans, service providers must disclose the full amount of direct and indirect compensation they receive and detail all delivered services (including fiduciary services).

The new regulations – 408(b)(2) – were proposed by the Department of Labor’s Employee Benefits Security Administration in July 2010. The original compliance deadline was delayed to allow service providers time to update systems and information-gathering processes to ensure compliance.

Advertisement

The Department of Labor also will require sponsors of self-directed ERISA-covered 401(k) plans to disclose plan and investment-level information including easy-to-understand details about investment options, fees and expenses. Regulation 404(a)(5), which goes into effect on the same date as the 408(b)(2) rule, will be accomplished by a transition rule requiring compliance within 60 days of the July 1 date. This will allow plan sponsors to generate and review information about retirement plans they receive from their service providers and distribute accurate information to plan participants.

For more information about these new regulations, dealers and retreaders are urged to consult their financial advisors.

Advertisement
Click to comment

POPULAR POSTS

Broberg-Les-Schwab Broberg-Les-Schwab

People

Les Schwab Names Mike Broberg as Next CEO

People

ATD Names Moid Alwy as Chief Supply Chain Officer

News

Hankook Tire Plans $1.6B Expansion of Clarksville, Tennessee Plant

People

Apollo Tyres Adds New Group Head of HR

Connect
Tire Review Magazine