The July 1 deadline for compliance with new 401(k) fee disclosure rules is approaching and plan fiduciaries should prepare, Employee Benefits Security Administration (EBSA) chief accountant Ian Dingwall recently indicated.
He told plan auditors that they should reach out to plan fiduciaries and remind them to ensure that they have developed a list of their service agreements and checked that those agreements are in writing. Agreements which are not in writing by the deadline are likely to result in a prohibited transaction. This recommendation encourages auditors to go beyond the scope of their responsibility, according to CFO magazine.
Auditors do not necessarily have all the knowledge and training required to determine whether all fees have been disclosed. That sort of evaluation may be better performed by human resources and employee benefit consultants, the news source suggests.
The U.S. Department of Labor recently released further information on the disclosure requirements. Among other things, DOL clarified that plan administrators are required to supply participants and beneficiaries with the first initial disclosures within 60 days after July 1 or the same period after the first day of the plan year beginning November. While further extensions will not occur, the DOL also indicated that plans and service providers acting in good faith will be judged accordingly if any enforcement actions are taken.
