If you are a 401(k) plan administrator that allows your plan participants to direct their investment choices, you have specific requirements that relate to fee disclosures. As an administrator, you must provide information related to:
- Available investment options.
- The performance for each investment.
- All fees and expenses associated with each investment choice.
This information needs to be provided to each participant before they enter the plan and make their first investment selections and then annually after that.
Most third-party providers will prepare the fee disclosure information for you but you should verify that all the required information is included and ensure that all participants are scheduled to and do receive the disclosures at the proper times.
As the Plan Fiduciary, this is a required step to ensure your 401(k) Plan remains compliant. It is also recommended that you maintain documentation that the disclosure was distributed (the date of the distribution, how it was provided, and a listing of all participants that were given the disclosure). As the Plan Sponsor, you should also keep a copy of the disclosure that can be provided in case of questions later or if a participant does not receive the original copy. If the service provider is responsible for distributing the disclosure, the Plan Sponsor should ensure the provider maintains the required documentation.
For more detailed information related to planning expenses and required disclosures, you may visit the Department of Labor website under the Employee Benefits Security Administration section.
Retirement plans can be very complex. As an innovative firm Summit CPA specializes in 401(k) audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine. We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance contact our office at (866) 497-9761 to schedule an appointment.