DOL Issues Proposed Regulations on Participant Disclosures for Participant-Directed Individual Account ERISA Plans

Regulations would be effective for plan years beginning on or after Jan. 1, 2009

August 13, 2008
In a July 23 press release, the Department of Labor (DOL) announced that proposed regulations (PDF) have been issued relating to required participant disclosures on investment options and fees for participant-directed individual account retirement plans that are covered by ERISA. The Department has also prepared a fact sheet describing the proposed regulations, which have the stated purpose of ensuring that all participants and beneficiaries in these plans have the information they need to make informed decisions about the management of their individual accounts and the investment of their retirement savings.

The proposed regulations require that uniform, basic disclosures be given to all participants and beneficiaries who direct the investment of assets in their individual accounts, and that investment-related information be presented in a format that makes comparisons easy. They mandate that the required disclosures be provided on a regular and periodic basis, generally when a participant becomes eligible to participate in the plan, and annually thereafter. Once final, the regulations would be effective for plan years beginning on or after Jan. 1, 2009.

Our initial review shows that the regulations would require plan fiduciaries to provide on an initial and annual basis: (1) basic information to participants and beneficiaries about their plan, any fees directly deducted from participant accounts (and a quarterly statement disclosing the dollar amount of such deducted fees), the plan’s designated investment alternatives (such as what investment alternatives are available under the plan, how to give investment instructions, and how to obtain more detailed information); and (2) investment-related information in a comparative chart, or similar format, that would give participants and beneficiaries a comparison of the plan’s designated investment alternatives. The DOL has provided a model comparative chart in conjunction with its issuance of the proposed regulations. The deadline for comments on the proposed regulations is Sept. 8, 2008.

TIAA-CREF shares the Department’s goal of ensuring that participants and beneficiaries have the information necessary to make informed decisions about the management and investment of their retirement plan accounts. We are reviewing these newly proposed regulations and may submit a comment letter to the DOL that we will share with you as the regulatory process moves forward.

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