distiribution fee is the only fee to Participant

[Jim Chad]

If the distribution, QDRO, and loan fees are the only fees charged to Participant, am I correct in thinking that I should:

1. Send that page of the SPD annually?

2. Send statement showing other fees actually charged quarterly?

3. When account is closed, the Participant does not currently get a "final" statement showing an ending balance = 0. Do I have to start sending this "zero balance" statement showing fee?

[Jim Chad]

Just bringing it back to life

[Bird]

1. Send that page of the SPD annually?

Hadn't thought of that but I guess so; thanks for the reminder.

2. Send statement showing other fees actually charged quarterly?

Yes.

3. When account is closed, the Participant does not currently get a "final" statement showing an ending balance = 0. Do I have to start sending this "zero balance" statement showing fee?

I think so. But frankly, there's not going to be much in the way of consequences for failure to do so. First, the participant would have to complain, and in that case, you just give them a statement and it goes away. I mean, I don't think the DOL is going to be coming around saying "show us a copy of the final statement for so-and-so. I'm not saying we shouldn't try to comply but...

[Jim Chad]

Does anyone think it would work to notify the participant of the fees charged when they start the paperwork for a loan or in-service withdrawal?

[GMK]

Does anyone think it would work to notify the participant of the fees charged when they start the paperwork for a loan or in-service withdrawal?

Advise participants of the fees at the start of the paperwork, so they don't come back later shocked and upset.

The SPD should identify the fees that the participant will be paying, but the exact amounts of those fees probably do not need to be listed in the SPD.

The required fee disclosures to participants that begin next spring will take care of all of these questions for us.

[Jim Chad]

GMK are you expecting further guidance before next spring?

[GMK]

GMK are you expecting further guidance before next spring?

I'm not. My poorly worded sentence was meant to reflect that the participant fee disclosures starting next spring will provide participants with this and other fee information on a regular schedule, all well defined.

And for plans that are not required to issue the new participant fee disclosures, I'd advise to annually notify participants of the fee amounts they pay and again whenever such fees change. A reminder of applicable fees in the initial distribution paperwork gives participants information at the time they want it, and similarly for a loan or QDRO. As before, I don't know that specific fee amounts need to be in the SPD.