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Participant Fee Disclosure

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Separate but related inquiry as to what others thoughts are regarding a different 404(a)(5) failure situation.

In this situation, the participant notice was provided, but contained inaccurate information (the 1, 3 and 5 years returns for a few of the investment options were incorrect as well as a few benchmarks). While I am know that a breach of fiduciary duty under 404(a)(1)(A) and (B) will have occurred, what I am curious about is, at a high level (given every situation and the extent of the error will vary), what steps would people take to mitigate the fiduciary's exposure? Anything beyond providing the correct notice ASAP such as calling out the errors and providing the participants with the option to rescind their original investment selection and make another?

I have searched far and wide and am surprised not to have been able to locate any information regarding any suggested corrective steps fiduciaries should take to mitigate exposure for a participant fee disclosure failure.

Any suggestions/thoughts are appreciated!

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Consider, but in the context of everything else, the following sentence from 29 C.F.R. 2550.404a-5(b)(1):

"A plan administrator will not be liable for the completeness and accuracy of the information used to satisfy these disclosure requirements when the plan administrator reasonably and in good faith relies on information received from or provided by a plan service provider or the issuer of a designated investment alternative."

Following ERISA section 404(a)(1)(B), a correction should be grounded on no less care, skill, prudence, and diligence than would be used by an experienced and prudent plan administrator facing the same facts and circumstances.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania



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