Employers that sponsor participant-directed individual account plans like 401(k)s and 403(b)s need to prepare for the annual disclosure requirement imposed on plan administrators under section 404 of the Employee Retirement Income Security Act. (See our earlier posts and article regarding the regulations that became effective last year.) 

Separate regulations required service providers to give plan administrators, by July 1, 2012, the detailed information plan administrators needed to comply with the initial participant disclosure requirement.   The deadline for that initial participant disclosure was August 30, 2012. Unless the employer reissued the information required for the participant annual disclosure subsequent to the first disclosure (in order to align the annual disclosure deadline date with the date on which other plan-wide disclosures are made, for example), the annual disclosure will need to be made by August 30, 2013. (It will need to be made earlier if the employer complied earlier than was required last year.) 

While third party administrators might prepare (and even distribute) these disclosures on behalf of plan administrators, the employer sponsoring the plan generally must ensure that it complies with the regulations. This is because the employer normally is the plan administrator and the applicable regulations impose this disclosure duty on plan administrators. Since service providers are required to give the detailed information needed for the plan administrator to make the annual disclosure to participants, employers should request the required information from the service providers now to ensure that the August 30th (or earlier) deadline is met.            

Finally, there is some “buzz” in the retirement plan community that the Department of Labor might adjust the timing rule described above to assist plan sponsors in aligning the date for distributing these disclosures with other plan-wide disclosures.  (At least three large associations of benefits professionals have asked the DOL to do so.)  We are following these developments and will post information about substantive future DOL guidance regarding these disclosures on this blog.