The ERISA Advisory Council (the “Council”), which was established under section 512 of ERISA to advise the Secretary of Labor on matters relating to welfare plans and pension benefit plans, recently released a report titled “Mandated Disclosure for Retirement Plans – Enhancing Effectiveness for Participants and Sponsors” (the “Report”). Most plan sponsors would agree that with the proliferation of required disclosures to participants and beneficiaries over approximately the past fifteen years, simplification in this area would be welcome. In that vein, the Report states that the Council examined “how to streamline the content and to make the delivery and availability of [three] mandatory retirement disclosures more practical and effective.”
Here is a list of the three disclosures addressed in the Report, as well as a summary of the Report’s related recommendations to the Department of Labor (the “DOL”):
The Report also states that “it was determined that any recommendation to update and/or replace the ERISA §404(a)(5) [participant fee] disclosure requirements was premature and the 2017 Council encourages a future Council to conduct a more thorough review of the topic and the effectiveness of fee disclosures in general, including ERISA §404(a)(5).”
Although the Report is limited to the above-referenced three ERISA disclosures, it notes that “the Council believes that the principles used to improve the disclosures mentioned above could be applied to other current and future mandated disclosures…” with a main goal being “to make retirement disclosures more understandable and useful for participants.” It will be interesting to see if the DOL adopts the Report’s recommendations, if a future Council investigates simplifying the ERISA §404(a)(5) [participant fee] disclosure, and if the IRS formally considers simplifying the content of its retirement plan disclosures (e.g., the safe harbor notice).
You can access the full Report here: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/about-us/erisa-advisory-council/2017-mandated-disclosure-for-retirement-plans.pdf