August 2023 Compliance News

DOL Request for Information

The Employee Benefits Security Administration of the U.S. Department of Labor (DOL) published a request for information (RFI) to help determine rulemaking regarding some of the SECURE 2.0 provisions that impact reporting and disclosure requirements under ERISA.

RFI Highlights

There are 31 numbered questions included in the RFI. Below is a summary of just a few. For complete details, refer to the RFI published August 11, 2023, at federalregister.gov.

Electronic statements: Should the safe harbor be modified so that electronic statements are only available if plan administrators can confirm whether an individual accessed or downloaded the statement? Can plan administrators reliably and accurately determine if individuals have electronically accessed statements?
Employee notice consolidation: What are the benefits and drawbacks to plans and plan participants if notices are consolidated? What guidance is needed to consolidate notices? Here is a list of the notices that plan administrators may, but are not required to consolidate:
1. Qualified default investment alternative notice;
2. Notice for preemption of automatic contribution arrangements (ACA);
3. Notice for alternative methods of meeting nondiscrimination requirements;
4. Notice for alternative methods of meeting nondiscrimination requirements for ACA;
5. Notice for special rules for certain withdrawals from eligible ACA.
Unenrolled participant disclosures: Unenrolled participants may be excluded from receiving certain disclosures and notices. Are there additional criteria the DOL and Treasury should consider for the definition of an unenrolled participant outside of what is already defined in SECURE2.0? Would a model notice be helpful for the annual notice that is required for unenrolled participants?
Fee Disclosure: Are current fee disclosures adequate in helping participants make informed decisions? Are there additional or different characteristics such as content, design, or formatting that could enhance understanding and effectiveness?
Pension-linked emergency savings account (PLESA): What guidance as well as what priority do plan administrators request to effectively implement PLESAs?
Defined benefit (DB) lump sum window notifications: How should the model notices for single-employer DB plans be modified to reflect the amendments to ERISA as well as for general improvements?
DOL Report on Pooled Employer Plans (PEP): The DOL must periodically study various aspects of the PEP and report to Congress every five years. What are potential data sources and methods the DOL could use in conducting their study?
Directed trustees serving as trustees of a PEP: The DOL intends to update the Form PR and its instructions to reflect that directed trustees may serve as fiduciaries. What guidance, if any, is needed to implement this provision?

Comments

Commenters are not required to answer every question from the RFI but are encouraged to identify the question number that aligns with their comments. Comments must be received by October 10, 2023,using one of the following methods:

Federal eRulemaking Portal at www.regulations.gov
Mail to Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: Request for Information –SECURE 2.0 Reporting and Disclosure

The subject matter in this communication is educational only and provided with the understanding that Principal^® is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel, financial professionals or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

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