404(a)(5) Disclosure - Pooled & Individual Accounts

[401(k)athryn]

I am probably overthinking this one...

A plan has individually directed accounts at American Funds.  We provide full fee disclosure relative to those accounts.  They also have some profit sharing money pooled in a brokerage account.  We have always disclosed a $75 distribution fee on the American Funds disclosure.  For the pooled account, we are now going to start using Penchecks for the distribution processing,.  They have a $35 fee that will be charged on top of our $75 fee.  This additional fee will only apply if the participant had money in the pooled account. 

Do I need to include this fee on the 404(a)(5) fee disclosure notice?  I think not because 404(a)(5) rules do not apply to pooled accounts, but I am not sure since this plan also has individually directed accounts.  I'm just not sure about anything anymore...

Thanks!

[RatherBeGolfing]

You have to disclose the fee.

Most 404a5 questions are answered by FAB 2012-02r.

FAB 2012-02r

Q1: A plan has both participant-directed and trustee-directed investments. Participants have the right to make investment decisions with respect to the portion of their accounts attributable to employee contributions. The plan's trustee directs the investment of the remainder of their accounts (e.g., employer contributions). Is this plan covered by the regulation?

A1: Yes, this plan is a "covered individual account plan" under paragraph (b)(2) of the regulation. This means the plan administrator must comply with the plan-related disclosures in paragraph (c) and the investment-related disclosures in paragraph (d). However, the plan administrator is not required to provide the investment-related information required under paragraph (d) of the regulation for the trustee-directed investments. Rather, the plan administrator's obligation under paragraph (d) is limited to the plan's designated investment alternatives.