Compliance News | February 9, 2024

Input Requested on Retirement Plan Disclosure and Reporting

The SECURE 2.0 Act requires the agencies responsible for administering ERISA — the Treasury Department (including the IRS), the DOL and the PBGC — to review existing reporting and disclosure requirements under both ERISA and the Internal Revenue Code and subsequently report to Congress on the effectiveness of those requirements. To help them fulfill those mandates, the agencies have published a broad, sweeping appeal for information on the adequacy and problems with current disclosure and reporting requirements for retirement plans, including comprehension, cost and usefulness.

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The appeal is in the form of a request for information (RFI). Plan sponsors that wish to respond to the RFI have until April 22, 2024 to submit comments.

This RFI is separate from the DOL’s earlier RFI on specific provisions of SECURE 2.0, which we discussed in our August 15, 2023 insight.

Statutory requirements for the agencies’ report to Congress

Under Section 319 of SECURE 2.0, the agencies’ report to Congress must include recommendations on consolidating, simplifying, standardizing and improving various notice requirements “with the dual goals of reducing compliance burdens and ensuring plan participants’ and beneficiaries’ timely receipt and better understanding of the information they need to monitor their plans, prepare for retirement, and get the benefits they have earned.”

Other issues that the report must address are:

  • How participants and beneficiaries are providing preferred contact information
  • The methods by which plan sponsors and plans are providing disclosures
  • The rate at which participants and beneficiaries are receiving, accessing, understanding and retaining disclosures

The RFI questions

The RFI consists of 24 questions, some specific, some more general.

They are divided into three categories: disclosures to plan participants and beneficiaries, reporting to the agencies and additional questions.

The questions are from all three agencies (and the IRS) with no distinction made among the different agencies.

Disclosures to participants

There are 13 questions on participant disclosures, focused on whether there are too many or too few disclosures, whether they should be consolidated and whether they are comprehensible. The agencies ask about how to make them more understandable to the wide variety of participants who are in different industries, of different ages, with different education levels, with disabilities, or of lower socioeconomic status. They also ask about how to improve “plain language” disclosure requirements on highly technical information, and the need for foreign-language disclosures.

The RFI also requests information on whether plan sponsors or their service providers can tell when a participant opens an electronic document and on whether participants save or print the document for future use. The agencies ask whether plans collect data on participant and beneficiary levels of engagement with the disclosures and how to measure it.

Additional questions ask for information on type of delivery and access. They also ask whether sponsors find that participants prefer to receive specific reports on paper, such as the individual benefit statements, and are willing to receive others electronically. The agencies want to know if there is any data on these preferences. Additionally, they want to know whether existing model disclosures are useful and whether the agencies should be providing additional models.

Reporting to agencies

These eight questions are focused on the plan sponsors’ costs for, and burdens of, providing disclosure. The agencies also ask about the usefulness of the reports to government from the perspective of participant groups and outside researchers.

Additional questions

The final three questions ask about coordination among the agencies, how best for the agencies to consult with all constituencies, and any other information that respondents want the agencies to consider.

Next steps

As noted above, responses to the RFI are due to the agencies by April 22, 2024.

Many plan sponsors have thought about these issues in the past and have already provided extensive comments to the agencies both formally and informally. In addition to the RFI responses, the agencies will use that information in formulating the report and any recommendations. Their report to Congress is due December 29, 2025.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.