Legal Alert: DOL Provides Guidance on Participant-Level Disclosure Regulation

Date   May 15, 2012

The Department of Labor (DOL) has published a Bulletin providing guidance on some of the most frequently asked questions relating to the participant-level disclosure regulation published in 2010.  


Executive Summary:  The Department of Labor (DOL) has published a Bulletin providing guidance on some of the most frequently asked questions relating to the participant-level disclosure regulation published in 2010. This regulation requires plan administrators to disclose certain plan and investment related information, including fee and expense information, to participants and beneficiaries in participant-directed individual account plans, such as 401(k) plans.[1]  See Field Assistance Bulletin No. 2012-02, available at:

The Bulletin contains 38 questions and answers.  Among other issues, the Bulletin: 

  • Clarifies the degree of detail that is required for the disclosure of administrative expenses charged against individual accounts and provides examples of when disclosure is not required (such as when the employer has undertaken to pay administrative expenses that could be charged against individual accounts, where these expenses have never been charged against the accounts and likely never will be, since such an explanation "is not likely to be a helpful piece of information to participants and beneficiaries").
  • Clarifies that disclosure of administrative expenses paid from revenue sharing received by the plan from one or more of the plan's designated investment alternatives must be disclosed under paragraph (c)(2)(ii)(C), even if there are no actual charges to individual plan accounts for the relevant quarter.  The DOL  notes that the purpose of the disclosure requirement under paragraph (c)(2)(ii)(C) is to inform participants and beneficiaries of plans that pay for some or all administrative services through investment-related charges so that they do not think that there are few or no administrative expenses associated with their participation in the plan.  This disclosure requirement, unlike that required under paragraphs (A) and (B) of paragraphs (c)(3)(ii) and (c)(2)(ii), does not depend on whether charges were actually made to individual accounts.
  • States that the DOL does not plan to provide a glossary of terms and identifies two sample glossaries that have been submitted by industry groups.
  • Clarifies that brokerage windows, self-directed brokerage accounts and similar arrangements are subject to the disclosure requirements for plan-related information, but are not subject to the disclosure requirements pertaining to investment-related information.
  • Provides that, pending further guidance in this area, when a platform holds more than 25 investment alternatives, the DOL, as a matter of enforcement policy, will not require that all of the investment alternatives be treated as designated investment alternatives if the plan administrator:
    • makes the required disclosures for at least three of the investment alternatives on the platform that collectively meet the "broad range" requirements in the ERISA 404(c) regulation, 29 CFR § 2550.404c-1(b)(3)(i)(B); and

    • makes the required disclosures with respect to all other investment alternatives on the platform in which at least five participants and beneficiaries, or, in the case of a plan with more than 500 participants and beneficiaries, at least one percent of all participants and beneficiaries, are invested on a date that is not more than 90 days preceding each annual disclosure.

  • Clarifies that the initial annual disclosure of plan-level and investment-level information must be furnished no later than 60 days after July 1, 2012, the effective date of the Section 408(b)(2) fiduciary-level fee disclosure regulation.[2]  For calendar year plans, this disclosure must be made by August 30, 2012. 
  • Clarifies that the initial quarterly statement of fees/expenses actually deducted must be furnished no later than 45 days after the end of the quarter in which the first set of initial disclosures must be furnished.  For calendar plan years, this is 45 days after the end of the third quarter (or November 14, 2012).  The Bulletin also clarifies that the quarterly disclosure is required to reflect only the fees and expenses actually deducted during the third quarter (not those deducted prior to the third quarter).
  • States that the DOL will not grant further broad-based extensions of the compliance deadlines for covered service providers and plan administrators.  However, the DOL acknowledges that some plan administrators and service providers furnished initial annual disclosures before the publication date of the Bulletin that may not fully comply with the guidance set forth in the Bulletin.  For enforcement purposes, the DOL will take into account whether service providers and plan administrators have acted in good faith based on a reasonable interpretation of the new regulations.  If they have done so, enforcement actions generally would be unnecessary if the service provider or plan administrator also establishes a plan for complying with the requirements of the Bulletin in future disclosures.
  • Clarifies that the fiduciary of a 404(c) plan does not have to furnish participant-level disclosure information before it must be furnished under the participant-level disclosure regulation, taking into account the changes to the regulation's transition rules that were published in the Federal Register on July 19, 2011.

Employers' Bottom Line:

The Bulletin provides helpful guidance for plan administrators required to provide plan and investment related information to plan participants and beneficiaries.  If you have any questions regarding the Bulletin or other employee benefits related questions, please contact Tiffany Downs,, any member of Ford & Harrison's Employee Benefits practice group, or the Ford & Harrison attorney with whom you usually work.

[1] For more information regarding this regulation, please see our October 21, 2010 Legal Alert, "401(k) Fee-Transparency and Disclosure Rule Published," available at:

[2] For a discussion of this regulation, please see our February 23, 2012 Legal Alert, "Final Section 408(b)(2) Disclosures Regulation Published; Disclosure Deadline Extended," available at: