Our shop participated in the Department of Labor’s (DOL’s) September 13, 2011 webcast: “Transparency of Fees and Expenses for Workers in 401(k)-Type Retirement Plans."  While much of the information was a repeat of items previously presented, there were several new wrinkles.  With the proviso that we do not in any way speak for the DOL, here are the items that caught our attention:

• The DOL appears to expect that the participant level disclosure will in fact refer participants to vendor (recordkeeper) websites for several of the details regarding investments – so much so that they created a page that discusses what could be discussed on the website.
• The DOL, to some degree, agrees that an overload of data in the disclosure could be counter-productive.
• Investments selected through a brokerage window are not held to the same disclosure standard as those found within the core menu.  The annual fees charged for the brokerage window, basic trading fees and a schedule of commissions etc.
• The model chart is just that, a model.  A good faith attempt at meeting the requirements with alternative formatting is acceptable.
• Electronic delivery is an acceptable avenue for disclosure, provided that: 1) it meets the electronic disclosure rules and, 2) participants have the opportunity to receive a paper copy upon request.
• Performance comparisons to standard benchmarks are a part of the required disclosure, but the use of additional blended or other tailored benchmarks is acceptable as a secondary comparison.  If a fund lacks a 10-year track record, the benchmark performance comparison will need to be aligned to the inception date of the investment.
• Any plan-wide administrative expenses must be disclosed as well as the basis upon which those charges will be allocated (pro rata or per capita).
• Of note per the DOL Fact Sheet: “The rule provides plan administrators protection from liability for the completeness and accuracy of information provided to participants if the plan administrator reasonably and in good faith relies upon information provided by a service provider.”

Please remember that the points above represent our understanding of the comments conveyed during the webcast.  Final confirmation for any of these elements should take place with your recordkeeper as well as your ERISA counsel.  For your reference, a copy of the presentation and one page toolkit of potentially helpful links used during the webcast can be found at this link with free log in required.  Finally, you may wish to review the most recent regulations regarding electronic communications, which can be found here.

Cobb Retirement Solutions does not provide legal or tax advice.

Marshall J. Cobb, CRSP, is president and founder of Cobb Retirement Solutions, LLC., an independent, fee-only firm offering qualified plan analysis and oversight exclusively to corporations and organizations. Cobb’s first-hand knowledge as a veteran representative of retirement plan vendors beginning in 1990 gives him a unique perspective as he advises his clients.  Cobb runs his office -- based in Houston, Texas -- with employees and clients across the country.