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ERISA Tips: Participant Fee Disclosure Requirements Essentially Replaced the Disclosure Requirements

By NTSA Net Staff • February 26, 2018 • 0 Comments
Editor’s Note: ERISA Tips is a new feature for the 403(b) Advisor. It is provided with you in mind — to make the newsletter more useful to you! If you have any content for ERISA Tips or the 403(b) Advisor that you would like to contribute or suggest, please contact John Iekel, editor of the 403(b) Advisor, at

This tip is taken from Michael Webb’s article “The Top Five Things You Need to Know About ERISA 404(c),” which originally ran on Nov. 21, 2014.

The release of the fee disclosure regulations under ERISA Section 404(a)(5), which apply to all participant-directed plans regardless of whether or not such plans qualify for 404(c) protection, resulted in dramatic changes to ERISA Section 404(c). Essentially, all of the disclosure requirements under 404(c) have been replaced by those of 404(a)(5). To qualify for 404(c) protection, plan sponsors must follow all of the requirements of the fee disclosure regulations under 404(a)(5), along with just two additional requirements of 404(c):

  • the rather obvious explanation that the plan is intended to comply with 404(c); and

  • if the plan offers employer stock or other securities as an investment option (not applicable to 403(b) plans), a description of the procedures for maintaining confidentiality when a participant invests in employer securities, and the name, address, and telephone number of the plan fiduciary responsible for monitoring compliance with the procedures.

Thus, for 403(b) plan sponsors, there is little else to disclose other than what is required under 404(a)(5). Thus, if such sponsors previously elected not to be covered under 404(c) because they found the disclosure requirements to be too onerous, they may wish to reconsider that decision, since they are now required to follow requirements that satisfy 99.9% of the disclosure obligations under 404(c).

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