Partner Corner: Understanding Disclosure Rules For Retirement Plan Participants

By: Kim McVicker

Make sure your plan participants have the information they need to make informed decisions.

Challenge: I've heard about a new participant-disclosure regulation for retirement plans. What does my association need to do?

Solution: The goal of the new disclosure regulations from the Department of Labor (DOL) is to make sure participants have the information they need to make informed decisions about their accounts. It should also provide a more consistent way for participants to compare investment options.

What does the regulation require? Plan fiduciaries must disclose certain plan-, fee- and investment-related information to participants in participant-directed defined-contribution plans that are subject to the Employee Retirement Income Security Act (ERISA). This includes 401(k) and 403(b) plans.

When does it go into effect? The regulation applies for plan years beginning on or after November 1, 2011. However, the DOL has extended a transition period that applies to existing plans based on plan year, and initial disclosure must be given no later than May 31, 2012, or 60 days after the plan's anniversary date that occurs on or after November 1.

What should be disclosed? The participant-disclosure regulation requires plan fiduciaries to provide certain disclosures to eligible participants regarding:

  • plan information
  • investment information
  • fee information

It's important that plan sponsors comply with this new rule. Your plan service provider should be able to help guide you through the process of meeting the regulation requirements. The Principal Financial Group offers several resources free of charge at, including a fee-disclosure white paper outlining the new rules and what plan sponsors need to know.

For more information, see the DOL's Final ERISA 404(a) Participant Regulation at

Kim McVicker is senior relationship manager at the Principal Financial Group. The Principal provides the ASAE-endorsed retirement solution for associations and nonprofits. Phone: 515-362-0342; Email: [email protected]