Annual Fee Disclosure Statement Template


Ministry of Labour (DoL) regulations require pension plan members to be informed in a timely and comprehensive manner of their investment fees. This will be completed in the form of a disclosure of the participation fee in accordance with paragraph 404(a)(5). Quarterly fee disclosure includes the dollar amount actually charged to the participant`s account in the previous quarter. Quarterly fee disclosure may be distributed as part of the quarterly member performance overviews required for member-based plans. For example, if the disclosure of the 2014 annual fee took place on November 1, 2014, the 401(k) plan has the option of providing its annual disclosure of fees for 2015 on November 1, 2015, or if the plan administrator determines that it would be beneficial for members and beneficiaries to subsequently provide disclosure of the annual fee with further notices to members that were issued on November 1, 2015. ==References== In 2015, the deferred distribution will be in line with the more flexible "14 months" rule. Quarterly Statements – Each quarterly statement reports two types of participant information: Employees who use a computer in the course of their normal daily work can receive the annual notice of disclosure of participation fees through their workplace email address. Employees who do not use a computer in their normal daily work and dismissed members who hold a plan balance must receive the notice of disclosure of the annual fee in paper form or through their personal email account. The delivery of the annual notice of disclosure of participation fees via the personal email address requires prior consent and may otherwise be difficult to manage.

Important note: Do not change anything. If any of the information is incorrect or raises other types of red flags, this is something you should communicate to your record holder or APT. Don`t try to change a fee disclosure – this could result in fiduciary risk. The good news is that this work shouldn`t be overwhelming. A qualified 401(k) supplier will do most of the heavy lifting by preparing all required disclosures. You just need to know what disclosures to expect and when to distribute each disclosure. The notice of disclosure of plan sponsors` annual fees to members must include certain information about the plans and investments related to the fees, including: Notice of Investment Modification – Describes upcoming changes to the plan`s mutual fund statement. You can also distribute a new notice of disclosure of the annual fee. Fee disclosure is all about transparency — and that`s because transparent fees help members choose the best options and save more money — the whole point of 401(k) retirement planning. Aside from all the jokes, a whole bunch of information (i.e.

work) goes into a typical fee disclosure, so it`s good that you (the plan sponsor or administrator) don`t have to do that part. A plan that does not comply with the cost disclosure requirements between the sponsor and the member will be considered a violation of ERISA, and the entire plan agreement will be considered a prohibited transaction with many negative consequences. 401(k) Plan sponsors have a fiduciary responsibility to distribute certain information to plan members from time to time. The purpose of these disclosures is important – to provide plan members with the information they need to make informed and timely decisions about their 401(k) account. However, these important disclosures from members can also be numerous – and spread throughout the year – giving the impression that their distribution is an overwhelming fiduciary responsibility for many 401(k) plan sponsors. The rules for disclosing fees may be relatively new, but they are in place due to a greater need for transparency. The definition of "each year thereafter" has changed several times as the Ministry of Labour has reviewed the practical issues related to disclosure. The first annual disclosure had to be submitted by August 30, 2012, which would have made the annual disclosure of a 2013 plan due no later than 12 months after the 2012 disclosure date. However, the Ministry of Labour recognized the need for companies to adjust their disclosure period to match the timing of other year-end disclosures and announced the option to delay the 2013 or 2014 disclosure once, provided the delayed disclosure is no more than 18 months after the previous year`s disclosure. Finally, to provide even more flexibility in the timing of disclosure of annual fees, the Ministry of Labour has issued guidelines (effective June 17, 2015) that define "annually thereafter" as meaning that future annual fee disclosures must be made at least once in a 14-month period (rather than once in every 12-month period).

regardless of whether the plan operates on a calendar or fiscal year basis. The use of this flexibility is subject to the need for the plan manager to reasonably determine that the use of the extended period will benefit members and beneficiaries. The annual notice of disclosure must be made available to all eligible employees and members with a balance in the plan, whether they are actively participating or dismissed. The disclosure of fees under paragraph 404(a)(5) is usually compiled by the recorder. It is then sent to the plan sponsor, who then distributes it to plan members. Affected service providers (as described above) must provide plan sponsors with the first disclosure of the annual fee by July 1, 2012. The required disclosures must be made available to all employees eligible for the Plan, including new employees and employees who are eligible but have not elected to participate in the Plan. A plan sponsor should work with the plan`s 401(k) provider to prepare the required disclosures. However, the plan sponsor may wish to have the details of the fees reviewed by a lawyer to confirm that they meet all the requirements. Certain other information must be provided upon request, including prospectuses, financial statements or reports, statements of the value of shares and a list of the assets that make up the portfolio of each designated investment solution that has a review treatment of the plan`s assets (generally non-mutual funds).

Multnomah Group has prepared an in-depth presentation summarizing the rules for disclosing final fees and will be happy to assist you with any specific questions you may have. You should also contact your registration provider or TPA to determine the level of support you can expect from them. The EBSA Office of Regulation and Interpretation is also available to answer questions about fee disclosure and can be reached at 1-208-693-8500. In addition, member information may be distributed electronically to current employees at their business email address if the following requirements are met: Plan sponsors operating in a calendar year must provide members with the first quarterly return by November 14, 2012. For plan sponsors operating in an unplanned plan year, the initial quarterly statement must be made available to members no later than 45 days after the quarter in which the initial annual notice was provided. The quarterly fee disclosure for members who hold an account on the plan must describe the fees actually paid by the member during the quarter. The purpose of the disclosure requirements for covered service provider sponsorship fees is to provide plan sponsors with sufficient information to ensure that the fees are reasonable, which is a fiduciary duty under the HPA. .

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