February 2007 Bulletin "Retirement Benefits Statements: Welcome Guidance and Relief"
Update: In Field Assistance Bulletin 2007-03, the DOL extended the date for providing the benefit statements discussed in this Bulletin. The extension is discussed in Segal's October 25, 2007 Compliance Alert.
The Department of Labor (DOL) recently issued needed guidance, including time relief, for the new individual benefit statement rules, which were added by the Pension Protection Act of 2006 (PPA'06). Until it issues regulations, the DOL will treat plan sponsors that comply with this guidance as complying with the law.
This Bulletin summarizes the following key provisions in guidance:
- Defined benefit plans are not required to provide statements until 2009 (at least).
- Statements must be provided 45 days after period-end.
- Information may be provided online.
- There is model investment principles and diversification language.
- Statements for defined contribution plans that permit all participants to direct investments must describe any plan limitations or restrictions on those rights.
Although the guidance clarifies that defined benefit plans are not required to provide statements until 2009, the Bulletin recommends that it is not too early for plan sponsors to start identifying actions they will need to take to comply.