Client Support Area for Fee Disclosure Regulations
This informational area is to support our clients in understanding and fulfilling obligations in relation to the new fee disclosure regulations issued by the Department of Labor.
What is 404a5?
404a5 is a regulation released by the DOL in 2012. In a nutshell it is a mandatory disclosure notice that Plan Sponsors must deliver to plan participants on an annual basis.
On July 22, 2013 the Department of Labor issued guidance that the deadline to provide disclosures to participants is extended to no later than 18 months after the 2012 disclosure was furnished. This means you have more time to comply and it also gives you the opportunity to consider combining your plan's annual fee disclosure with other scheduled communications such as annual disclosures and open enrollment education.
What do our clients need to do? The Recordkeeper's Role
The 404a5 fee disclosure regulations are centered primarily around the investment options and asset based charges to the plan and it's participants, for this reason it is the Recordkeeping Vendor (Financial Institution) that has worked to provide solutions and support to our Plan Sponsor clients. We ask that our clients work directly with their Recordkeeping Vendor as many of the tools, solutions and support are unique to your provider. PDC is confident that you will find everything is in place that you need to comply with these new regulations and that proper support has been made available to assist you.
Helpful Overview Piece from PDC
Download PDC Overview of 404a5 regulation
Special Information for Clients that utilize a
Outside Self Directed Brokerage Account or Non Recordkeeping Vendor
A small percentage of our clients choose to utilize alternatives to "packaged" recordkeeping vendors and instead use firms like Charles Schwab, Fidelity, TD Ameritrade or other discount brokerage providers. Situations and solutions vary from vendor to vendor but it is our understanding that many of these types of providers will not assist Plan Sponsors when it comes to compliance with 404a5 regulations. As of late 2013 there also continues to be heated debate about whether these types of unlimited investment option programs can even realistically comply with 404a5 regulations. Our clients using this type of investment solution can use the below provided Template, as well as refer to the below articles and information pieces. As on ongoing more holistic solution, PDC stands ready to assist these clients with considering moving the retirement plan to a more modern day "packaged" approach that is designed specifically for company sponsored retirement plans and the responsibilities that come with them.
FBO/Self Directed Brokerage Account 404a5 Disclosure Template
Download SDBA 404a5 Template
PDC FBO/Self Directed Brokerage Account Client Notice
Download PDC FBO/SDBA Notice