What is a 404 A 5 disclosure?


What is a 404 A 5 disclosure?

Employee Fee Disclosure – 404(a)(5) ERISA Section Under 404(a)(5) requires 401k providers to disclose how much employees personally pay each quarter.

What is a 408 B 2 fee disclosure?

The 408(b)(2) disclosure regulation requires a covered service provider that reasonably expects to be a fiduciary to an ERISA plan to disclose to the responsible plan fiduciary its status as a fiduciary, along with a description of its services and fees.

Who gets a fee disclosure statement?

The U.S. DOL Fee Disclosure Rules (ERISA 408(b)(2)) require covered service providers, such as Paychex, to disclose all fees associated with qualified retirement plans to clients and enable the plan fiduciary to make informed decisions about the services, costs, and the service provider.

Is 401k participation mandatory?

While participation in a 401(k) plan is not mandatory, with a 401(a) plan, it often is. Employee contributions to 401(a) plan are determined by the employer, while 401(k) participants decide how much, if anything, they wish to contribute to their plan.

What document should a participant receive when eligible for the plan?

One of the most important documents participants are entitled to receive automatically when becoming a participant of an ERISA-covered retirement plan or a beneficiary receiving benefits under such a plan, is a summary of the plan, called the summary plan description or SPD.

Can 401k participant notices be sent electronically?

This notice cannot be sent electronically, even to participants that already receive electronic disclosures under the “wired at work” safe harbor.

What is a participant fee disclosure?

The Department of Labor issued participant fee disclosure rules for participant-directed plans which first became effective in 2012. These fee disclosures are designed to help participants understand how much they are paying for administration of their 401(k) plan.

What is the difference between 404a5 and 408 B 2?

But this requirement comes from 404(a)-5, not 408(b)(2), which is a very meaningful distinction: failure to disclose a fee charged against a participant’s account under 404(a)-5 may be a fiduciary breach, but it does not otherwise cause a potentially expensive failure in the prohibited transaction exemption under 408(b …

What is participant fee disclosure?

What is a participant fee disclosure notice?

Annual fee disclosure notice – Describes information about plan fees and investments. This notice consists of two parts: Participant fee disclosure – Reports certain plan administration information, including the plan and individual-level fees that might be deducted from participant accounts.

How do I find my 401k fee disclosure?

“For plan participants, this is found on 404(a)(5) participant fee disclosures. For plan sponsors, this is found on 408(b)(2) disclosures.” In theory, you would want to look at these disclosures (at least as a start) to begin to determine whether your plan is in for a “fee surprise.”