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Pension Resource

29 C.F.R. § 2550.404a-5

Fiduciary requirements for disclosure in participant-directed individual account plans.
CFR 2016 annual edition (revised as of 2016-07-01) · superseded Jan 1, 2017 · last amended by 80 FR 14304, Mar. 19, 2015
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(a) General. The investment of plan assets is a fiduciary act governed by the fiduciary standards of section 404(a)(1)(A) and (B) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), 29 U.S.C. 1001 et seq. (all section references herein are references to ERISA unless otherwise indicated). Pursuant to section 404(a)(1)(A) and (B), fiduciaries must discharge their duties with respect to the plan prudently and solely in the interest of participants and beneficiaries. When the documents and instruments governing an individual account plan, described in paragraph (b)(2) of this section, provide for the allocation of investment responsibilities to participants or beneficiaries, the plan administrator, as defined in section 3(16), must take steps to ensure, consistent with section 404(a)(1)(A) and (B), that such participants and beneficiaries, on a regular and periodic basis, are made aware of their rights and responsibilities with respect to the investment of assets held in, or contributed to, their accounts and are provided sufficient information regarding the plan, including fees and expenses, and regarding designated investment alternatives, including fees and expenses attendant thereto, to make informed decisions with regard to the management of their individual accounts.
(b) Satisfaction of duty to disclose.
(1) In general. The plan administrator of a covered individual account plan must comply with the disclosure requirements set forth in paragraphs (c) and (d) of this section with respect to each participant or beneficiary that, pursuant to the terms of the plan, has the right to direct the investment of assets held in, or contributed to, his or her individual account. Compliance with paragraphs (c) and (d) of this section will satisfy the duty to make the regular and periodic disclosures described in paragraph (a) of this section, provided that the information contained in such disclosures is complete and accurate. A plan administrator will not be liable for the completeness and accuracy of 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.
(2) Covered individual account plan. For purposes of paragraph (b)(1) of this section, a “covered individual account plan” is any participant-directed individual account plan as defined in section 3(34) of ERISA, except that such term shall not include plans involving individual retirement accounts or individual retirement annuities described in sections 408(k) (“simplified employee pension”) or 408(p) (“simple retirement account”) of the Internal Revenue Code of 1986.
(c) Disclosure of plan-related information. A plan administrator (or person designated by the plan administrator to act on its behalf) shall provide to each participant or beneficiary the plan-related information described in paragraphs (c)(1) through (4) of this section, based on the latest information available to the plan.
(1) General.
(i) On or before the date on which a participant or beneficiary can first direct his or her investments and at least annually thereafter:
(A) An explanation of the circumstances under which participants and beneficiaries may give investment instructions;
(B) An explanation of any specified limitations on such instructions under the terms of the plan, including any restrictions on transfer to or from a designated investment alternative;
(C) A description of or reference to plan provisions relating to the exercise of voting, tender and similar rights appurtenant to an investment in a designated investment alternative as well as any restrictions on such rights;
(D) An identification of any designated investment alternatives offered under the plan;
(E) An identification of any designated investment managers; and
(F) A description of any “brokerage windows,” “self-directed brokerage accounts,” or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan.
(ii) If there is a change to the information described in paragraph (c)(1)(i)(A) through (F) of this section, each participant and beneficiary must be furnished a description of such change at least 30 days, but not more than 90 days, in advance of the effective date of such change, unless the inability to provide such advance notice is due to events that were unforeseeable or circumstances beyond the control of the plan administrator, in which case notice of such change must be furnished as soon as reasonably practicable.
(2) Administrative expenses. (i)(A) On or before the date on which a participant or beneficiary can first direct his or her investments and at least annually thereafter, an explanation of any fees and expenses for general plan administrative services (e.g., legal, accounting, recordkeeping), which may be charged against the individual accounts of participants and beneficiaries and are not reflected in the total annual operating expenses of any designated investment alternative, as well as the basis on which such charges will be allocated (e.g., pro rata, per capita) to, or affect the balance of, each individual account.
(B) If there is a change to the information described in paragraph (c)(2)(i)(A) of this section, each participant and beneficiary must be furnished a description of such change at least 30 days, but not more than 90 days, in advance of the effective date of such change, unless the inability to provide such advance notice is due to events that were unforeseeable or circumstances beyond the control of the plan administrator, in which case notice of such change must be furnished as soon as reasonably practicable.
(ii) At least quarterly, a statement that includes:
(A) The dollar amount of the fees and expenses described in paragraph (c)(2)(i)(A) of this section that are actually charged (whether by liquidating shares or deducting dollars) during the preceding quarter to the participant's or beneficiary's account for such services;
(B) A description of the services to which the charges relate (e.g., plan administration, including recordkeeping, legal, accounting services); and
(C) If applicable, an explanation that, in addition to the fees and expenses disclosed pursuant to paragraph (c)(2)(ii) of this section, some of the plan's administrative expenses for the preceding quarter were paid from the total annual operating expenses of one or more of the plan's designated investment alternatives (e.g., through revenue sharing arrangements, Rule 12b-1 fees, sub-transfer agent fees).
(3) Individual expenses. (i)(A) On or before the date on which a participant or beneficiary can first direct his or her investments and at least annually thereafter, an explanation of any fees and expenses that may be charged against the individual account of a participant or beneficiary on an individual, rather than on a plan-wide, basis (e.g., fees attendant to processing plan loans or qualified domestic relations orders, fees for investment advice, fees for brokerage windows, commissions, front- or back-end loads or sales charges, redemption fees, transfer fees and similar expenses, and optional rider charges in annuity contracts) and which are not reflected in the total annual operating expenses of any designated investment alternative.
(B) If there is a change to the information described in paragraph (c)(3)(i)(A) of this section, each participant and beneficiary must be furnished a description of such change at least 30 days, but not more than 90 days, in advance of the effective date of such change, unless the inability to provide such advance notice is due to events that were unforeseeable or circumstances beyond the control of the plan administrator, in which case notice of such change must be furnished as soon as reasonably practicable.
(ii) At least quarterly, a statement that includes:
(A) The dollar amount of the fees and expenses described in paragraph (c)(3)(i)(A) of this section that are actually charged (whether by liquidating shares or deducting dollars) during the preceding quarter to the participant's or beneficiary's account for individual services; and
(B) A description of the services to which the charges relate (e.g., loan processing fee).
(4) Disclosures on or before first investment. The requirements of paragraphs (c)(1)(i), (c)(2)(i)(A), (c)(3)(i)(A) of this section to furnish information on or before the date on which a participant or beneficiary can first direct his or her investments may be satisfied by furnishing to the participant or beneficiary the most recent annual disclosure furnished to participants and beneficiaries pursuant those paragraphs and any updates to the information furnished to participants and beneficiaries pursuant to paragraphs (c)(1)(ii), (c)(2)(i)(B) and (c)(3)(i)(B) of this section.
(d) Disclosure of investment-related information. The plan administrator (or person designated by the plan administrator to act on its behalf), based on the latest information available to the plan, shall:
(1) Information to be provided automatically. Except as provided in paragraph (i) of this section, furnish to each participant or beneficiary on or before the date on which he or she can first direct his or her investments and at least annually thereafter, the following information with respect to each designated investment alternative offered under the plan—
(i) Identifying information. Such information shall include:
(A) The name of each designated investment alternative; and
(B) The type or category of the investment (e.g., money market fund, balanced fund (stocks and bonds), large-cap stock fund, employer stock fund, employer securities).
(ii) Performance data.
(A) For designated investment alternatives with respect to which the return is not fixed, the average annual total return of the investment for 1-, 5-, and 10-calendar year periods (or for the life of the alternative, if shorter) ending on the date of the most recently completed calendar year; as well as a statement indicating that an investment's past performance is not necessarily an indication of how the investment will perform in the future; and
(B) For designated investment alternatives with respect to which the return is fixed or stated for the term of the investment, both the fixed or stated annual rate of return and the term of the investment. If, with respect to such a designated investment alternative, the issuer reserves the right to adjust the fixed or stated rate of return prospectively during the term of the contract or agreement, the current rate of return, the minimum rate guaranteed under the contract, if any, and a statement advising participants and beneficiaries that the issuer may adjust the rate of return prospectively and how to obtain (e.g., telephone or Web site) the most recent rate of return required under this section.
(iii) Benchmarks. For designated investment alternatives with respect to which the return is not fixed, the name and returns of an appropriate broad-based securities market index over the 1-, 5-, and 10-calendar year periods (or for the life of the alternative, if shorter) comparable to the performance data periods provided under paragraph (d)(1)(ii)(A) of this section, and which is not administered by an affiliate of the investment issuer, its investment adviser, or a principal underwriter, unless the index is widely recognized and used.
(iv) Fee and expense information.
(A) For designated investment alternatives with respect to which the return is not fixed:
(1) The amount and a description of each shareholder-type fee (fees charged directly against a participant's or beneficiary's investment, such as commissions, sales loads, sales charges, deferred sales charges, redemption fees, surrender charges, exchange fees, account fees, and purchase fees, which are not included in the total annual operating expenses of any designated investment alternative) and a description of any restriction or limitation that may be applicable to a purchase, transfer, or withdrawal of the investment in whole or in part (such as round trip, equity wash, or other restrictions);
(2) The total annual operating expenses of the investment expressed as a percentage (i.e., expense ratio), calculated in accordance with paragraph (h)(5) of this section;
(3) The total annual operating expenses of the investment for a one-year period expressed as a dollar amount for a $1,000 investment (assuming no returns and based on the percentage described in paragraph (d)(1)(iv)(A)(2) of this section);
(4) A statement indicating that fees and expenses are only one of several factors that participants and beneficiaries should consider when making investment decisions; and
(5) A statement that the cumulative effect of fees and expenses can substantially reduce the growth of a participant's or beneficiary's retirement account and that participants and beneficiaries can visit the Employee Benefit Security Administration's Web site for an example demonstrating the long-term effect of fees and expenses.
(B) For designated investment alternatives with respect to which the return is fixed for the term of the investment, the amount and a description of any shareholder-type fees and a description of any restriction or limitation that may be applicable to a purchase, transfer or withdrawal of the investment in whole or in part.
(v) Internet Web site address. An Internet Web site address that is sufficiently specific to provide participants and beneficiaries access to the following information regarding the designated investment alternative:
(A) The name of the alternative's issuer;
(B) The alternative's objectives or goals in a manner consistent with Securities and Exchange Commission Form N-1A or N-3, as appropriate;
(C) The alternative's principal strategies (including a general description of the types of assets held by the investment) and principal risks in a manner consistent with Securities and Exchange Commission Form N-1A or N-3, as appropriate;
(D) The alternative's portfolio turnover rate in a manner consistent with Securities and Exchange Commission Form N-1A or N-3, as appropriate;
(E) The alternative's performance data described in paragraph (d)(1)(ii) of this section updated on at least a quarterly basis, or more frequently if required by other applicable law; and
(F) The alternative's fee and expense information described in paragraph (d)(1)(iv) of this section.
(vi) Glossary. A general glossary of terms to assist participants and beneficiaries in understanding the designated investment alternatives, or an Internet Web site address that is sufficiently specific to provide access to such a glossary along with a general explanation of the purpose of the address.
(vii) Annuity options. If a designated investment alternative is part of a contract, fund or product that permits participants or beneficiaries to allocate contributions toward the future purchase of a stream of retirement income payments guaranteed by an insurance company, the information set forth in paragraph (i)(2)(i) through (i)(2)(vii) of this section with respect to the annuity option, to the extent such information is not otherwise included in investment-related fees and expenses described in paragraph (d)(1)(iv).
(viii) Disclosures on or before first investment. The requirement in paragraph (d)(1) of this section to provide information to a participant or beneficiary on or before the date on which the participant or beneficiary can first direct his or her investments may be satisfied by furnishing to the participant or beneficiary the most recent annual disclosure furnished to participants and beneficiaries pursuant to paragraph (d)(1) of this section.
(2) Comparative format.
(i) Furnish the information described in paragraph (d)(1) and, if applicable, paragraph (i) of this section in a chart or similar format that is designed to facilitate a comparison of such information for each designated investment alternative available under the plan and prominently displays the date, and that includes:
(A) A statement indicating the name, address, and telephone number of the plan administrator (or a person or persons designated by the plan administrator to act on its behalf) to contact for the provision of the information required by paragraph (d)(4) of this section;
(B) A statement that additional investment-related information (including more current performance information) is available at the listed Internet Web site addresses (see paragraph (d)(1)(v) of this section); and
(C) A statement explaining how to request and obtain, free of charge, paper copies of the information required to be made available on a Web site pursuant to paragraph (d)(1)(v), paragraph (i)(2)(vi), relating to annuity options, or paragraph (i)(3), relating to fixed-return investments, of this section.
(ii) Nothing in this section shall preclude a plan administrator from including additional information that the plan administrator determines appropriate for such comparisons, provided such information is not inaccurate or misleading.
(3) Information to be provided subsequent to investment. Furnish to each investing participant or beneficiary, subsequent to an investment in a designated investment alternative, any materials provided to the plan relating to the exercise of voting, tender and similar rights appurtenant to the investment, to the extent that such rights are passed through to such participant or beneficiary under the terms of the plan.
(4) Information to be provided upon request. Furnish to each participant or beneficiary, either at the times specified in paragraph (d)(1), or upon request, the following information relating to designated investment alternatives—
(i) Copies of prospectuses (or, alternatively, any short-form or summary prospectus, the form of which has been approved by the Securities and Exchange Commission) for the disclosure of information to investors by entities registered under either the Securities Act of 1933 or the Investment Company Act of 1940, or similar documents relating to designated investment alternatives that are provided by entities that are not registered under either of these Acts;
(ii) Copies of any financial statements or reports, such as statements of additional information and shareholder reports, and of any other similar materials relating to the plan's designated investment alternatives, to the extent such materials are provided to the plan;
(iii) A statement of the value of a share or unit of each designated investment alternative as well as the date of the valuation; and
(iv) A list of the assets comprising the portfolio of each designated investment alternative which constitute plan assets within the meaning of 29 CFR 2510.3-101 and the value of each such asset (or the proportion of the investment which it comprises).
(e) Form of disclosure.
(1) The information required to be disclosed pursuant to paragraphs (c)(1)(i), (c)(2)(i)(A), and (c)(3)(i)(A) of this section may be provided as part of the plan's summary plan description furnished pursuant to ERISA section 102 or as part of a pension benefit statement furnished pursuant to ERISA section 105(a)(1)(A)(i), if such summary plan description or pension benefit statement is furnished at a frequency that comports with paragraph (c)(1)(i) of this section.
(2) The information required to be disclosed pursuant to paragraphs (c)(2)(ii) and (c)(3)(ii) of this section may be included as part of a pension benefit statement furnished pursuant to ERISA section 105(a)(1)(A)(i).
(3) A plan administrator that uses and accurately completes the model in the Appendix, taking into account each designated investment alternative offered under the plan, will be deemed to have satisfied the requirements of paragraph (d)(2) of this section.
(4) Except as otherwise explicitly required herein, fees and expenses may be expressed in terms of a monetary amount, formula, percentage of assets, or per capita charge.
(5) The information required to be prepared by the plan administrator for disclosure under this section shall be written in a manner calculated to be understood by the average plan participant.
(f) Selection and monitoring. Nothing herein is intended to relieve a fiduciary from its duty to prudently select and monitor providers of services to the plan or designated investment alternatives offered under the plan.
(g) Manner of furnishing. Reserved.
(h) Definitions. For purposes of this section, the term—
(1) At least annually thereafter means at least once in any 14-month period, without regard to whether the plan operates on a calendar year or fiscal year basis.
(2) At least quarterly means at least once in any 3-month period, without regard to whether the plan operates on a calendar or fiscal year basis.
(3) Average annual total return means the average annual compounded rate of return that would equate an initial investment in a designated investment alternative to the ending redeemable value of that investment calculated with the before tax methods of computation prescribed in Securities and Exchange Commission Form N-1A, N-3, or N-4, as appropriate, except that such method of computation may exclude any front-end, deferred or other sales loads that are waived for the participants and beneficiaries of the covered individual account plan.
(4) Designated investment alternative means any investment alternative designated by the plan into which participants and beneficiaries may direct the investment of assets held in, or contributed to, their individual accounts. The term “designated investment alternative” shall not include “brokerage windows,” “self-directed brokerage accounts,” or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan.
(5) Total annual operating expenses means:
(i) In the case of a designated investment alternative that is registered under the Investment Company Act of 1940, the annual operating expenses and other asset-based charges before waivers and reimbursements (e.g., investment management fees, distribution fees, service fees, administrative expenses, separate account expenses, mortality and expense risk fees) that reduce the alternative's rate of return, expressed as a percentage, calculated in accordance with the required Securities and Exchange Commission form, e.g., Form N-1A (open-end management investment companies) or Form N-3 or N-4 (separate accounts offering variable annuity contracts); or
(ii) In the case of a designated investment alternative that is not registered under the Investment Company Act of 1940, the sum of the fees and expenses described in paragraphs (h)(5)(ii)(A) through (C) of this section before waivers and reimbursements, for the alternative's most recently completed fiscal year, expressed as a percentage of the alternative's average net asset value for that year—
(A) Management fees as described in the Securities and Exchange Commission Form N-1A that reduce the alternative's rate of return,
(B) Distribution and/or servicing fees as described in the Securities and Exchange Commission Form N-1A that reduce the alternative's rate of return, and
(C) Any other fees or expenses not included in paragraphs (h)(5)(ii)(A) or (B) of this section that reduce the alternative's rate of return (e.g., externally negotiated fees, custodial expenses, legal expenses, accounting expenses, transfer agent expenses, recordkeeping fees, administrative fees, separate account expenses, mortality and expense risk fees), excluding brokerage costs described in Item 21 of Securities and Exchange Commission Form N-1A.
(i) Special rules. The rules set forth in this paragraph apply solely for purposes of paragraph (d)(1) of this section.
(1) Qualifying employer securities. In the case of designated investment alternatives designed to invest in, or primarily in, qualifying employer securities, within the meaning of section 407 of ERISA, the following rules shall apply—
(i) In lieu of the requirements of paragraph (d)(1)(v)(C) of this section (relating to principal strategies and principal risks), provide an explanation of the importance of a well-balanced and diversified investment portfolio.
(ii) The requirements of paragraph (d)(1)(v)(D) of this section (relating to portfolio turnover rate) do not apply to such designated investment alternatives.
(iii) The requirements of paragraph (d)(1)(v)(F) of this section (relating to fee and expense information) do not apply to such designated investment alternatives, unless the designated investment alternative is a fund with respect to which participants or beneficiaries acquire units of participation, rather than actual shares, in exchange for their investment.
(iv) The requirements of paragraph (d)(1)(iv)(A)(2) of this section (relating to total annual operating expenses expressed as a percentage) do not apply to such designated investment alternatives, unless the designated investment alternative is a fund with respect to which participants or beneficiaries acquire units of participation, rather than actual shares, in exchange for their investment.
(v) The requirements of paragraph (d)(1)(iv)(A)(3) of this section (relating to total annual operating expenses expressed as a dollar amount per $1,000 invested) do not apply to such designated investment alternatives, unless the designated investment alternative is a fund with respect to which participants or beneficiaries acquire units of participation, rather than actual shares, in exchange for their investment.
(vi)
(A) With respect to the requirement in paragraph (d)(1)(ii)(A) of this section (relating to performance data for 1-, 5-, and 10-year periods), the definition of “average annual total return” as defined in paragraph (i)(1)(vi)(B) of this section shall apply to such designated investment alternatives in lieu of the definition in paragraph (h)(3) of this section if the qualifying employer securities are publicly traded on a national exchange or generally recognized market and the designated investment alternative is not a fund with respect to which participants or beneficiaries acquire units of participation, rather than actual shares, in exchange for their investment.
(B) The term “average annual total return” means the change in value of an investment in one share of stock on an annualized basis over a specified period, calculated by taking the sum of the dividends paid during the measurement period, assuming reinvestment, plus the difference between the stock price (consistent with ERISA section 3(18)) at the end and at the beginning of the measurement period, and dividing by the stock price at the beginning of the measurement period; reinvestment of dividends is assumed to be in stock at market prices at approximately the same time actual dividends are paid.
(C) The definition of “average annual total return” in paragraph (i)(1)(vi)(B) of this section shall apply to such designated investment alternatives consisting of employer securities that are not publicly traded on a national exchange or generally recognized market, unless the designated investment alternative is a fund with respect to which participants or beneficiaries acquire units of participation, rather than actual shares, in exchange for their investment. Changes in value shall be calculated using principles similar to those set forth in paragraph (i)(1)(vi)(B) of this section.
(2) Annuity options. In the case of a designated investment alternative that is a contract, fund or product that permits participants or beneficiaries to allocate contributions toward the current purchase of a stream of retirement income payments guaranteed by an insurance company, the plan administrator shall, in lieu of the information required by paragraphs (d)(1)(i) through (d)(1)(v), provide each participant or beneficiary the following information with respect to each such option:
(i) The name of the contract, fund or product;
(ii) The option's objectives or goals (e.g., to provide a stream of fixed retirement income payments for life);
(iii) The benefits and factors that determine the price (e.g., age, interest rates, form of distribution) of the guaranteed income payments;
(iv) Any limitations on the ability of a participant or beneficiary to withdraw or transfer amounts allocated to the option (e.g., lock-ups) and any fees or charges applicable to such withdrawals or transfers;
(v) Any fees that will reduce the value of amounts allocated by participants or beneficiaries to the option, such as surrender charges, market value adjustments, and administrative fees;
(vi) A statement that guarantees of an insurance company are subject to its long-term financial strength and claims-paying ability; and
(vii) An Internet Web site address that is sufficiently specific to provide participants and beneficiaries access to the following information—
(A) The name of the option's issuer and of the contract, fund or product;
(B) Description of the option's objectives or goals;
(C) Description of the option's distribution alternatives/guaranteed income payments (e.g., payments for life, payments for a specified term, joint and survivor payments, optional rider payments), including any limitations on the right of a participant or beneficiary to receive such payments;
(D) Description of costs and/or factors taken into account in determining the price of benefits under an option's distribution alternatives/guaranteed income payments (e.g., age, interest rates, other annuitization assumptions);
(E) Description of any limitations on the right of a participant or beneficiary to withdraw or transfer amounts allocated to the option and any fees or charges applicable to a withdrawal or transfer; and
(F) Description of any fees that will reduce the value of amounts allocated by participants or beneficiaries to the option (e.g., surrender charges, market value adjustments, administrative fees).
(3) Fixed-return investments. In the case of a designated investment alternative with respect to which the return is fixed for the term of the investment, the plan administrator shall, in lieu of complying with the requirements of paragraph (d)(1)(v) of this section, provide an Internet Web site address that is sufficiently specific to provide participants and beneficiaries access to the following information—
(i) The name of the alternative's issuer;
(ii) The alternatives objectives or goals (e.g., to provide stability of principal and guarantee a minimum rate of return);
(iii) The alternative's performance data described in paragraph (d)(1)(ii)(B) of this section updated on at least a quarterly basis, or more frequently if required by other applicable law;
(iv) The alternative's fee and expense information described in paragraph (d)(1)(iv)(B) of this section.
(4) Target date or similar funds. Reserved.
(j) Dates.
(1) Effective date. This section shall be effective on December 20, 2010.
(2) Applicability date. This section shall apply to covered individual account plans for plan years beginning on or after November 1, 2011.
(3) Transitional rules.
(i)
(A) Notwithstanding paragraphs (b), (c) and (d) of this section, the initial disclosures required on or before the date on which a participant or beneficiary can first direct his or her investments must be furnished no later than the later of 60 days after such applicability date or 60 days after the effective date of 29 CFR 2550.408b-2(c).
(B) Notwithstanding paragraphs (b) and (c) of this section, the initial disclosures required under paragraphs (c)(2)(ii) and (c)(3)(ii) of this section must be furnished no later than 45 days after the end of the quarter in which the disclosure referred to in paragraph (j)(3)(i)(A) of this section was required to be furnished to participants and beneficiaries.
(ii) For plan years beginning before October 1, 2021, if a plan administrator reasonably and in good faith determines that it does not have the information on expenses attributable to the plan that is necessary to calculate, in accordance with paragraph (h)(3) of this section, the 5-year and 10-year average annual total returns for a designated investment alternative that is not registered under the Investment Company Act of 1940, the plan administrator may use a reasonable estimate of such expenses or the plan administrator may use the most recently reported total annual operating expenses of the designated investment alternative as a substitute for such expenses. When a plan administrator uses a reasonable estimate or the most recently reported total annual operating expenses as a substitute for actual expenses pursuant to this paragraph, the administrator shall inform participants of the basis on which the returns were determined. Nothing in this section requires disclosure of returns for periods before the inception of a designated investment alternative.
ER20OC10.000
ER20OC10.001
ER20OC10.002
ER20OC10.003
Source credit, amendments & notes

[75 FR 64937, Oct. 20, 2010, as amended at 76 FR 42542, July 19, 2011; 80 FR 14304, Mar. 19, 2015]

29 C.F.R. § 2550.404a-5 — Fiduciary requirements for disclosure in participant-directed individual account plans. · CFR 2016 annual edition (revised as of 2016-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-2550.404a-5&asof=2016-01-03 · printed Oct 16, 2026
On this page
  • (a) General.
  • (b) Satisfaction of duty to disclose.
  • (c) Disclosure of plan-related information.
  • (d) Disclosure of investment-related information.
  • (e) Form of disclosure.
  • (f) Selection and monitoring.
  • (g) Manner of furnishing. Reserved.
  • (h) Definitions.
  • (j) Dates.
Implements
ERISA § 404 (29 U.S.C. § 1104) Fiduciary duties
Cited by (code & regs)
Guidance addressing this section
Department of Labor (EBSA)
Final Rules
Proposed Rules
  • 79 FR 49469Proposed Aug 21, 2014 — Request for Information Regarding Standards for Brokerage Windows in Participant-Directed Individual Account Plans Comments due Nov 19, 2014 (c)(1)(i)(F)(c)(3)(ii)(A)(h)(4)
  • 76 FR 31544Proposed Jun 1, 2011 — Requirements for Fee Disclosure to Plan Fiduciaries and Participants-Applicability Dates Comments due Jun 15, 2011
  • 75 FR 73987Proposed Nov 30, 2010 — Target Date Disclosure Comments due Jan 14, 2011 (d)(1)(d)(3)(d)(4)(i)(4)
Technical Releases
Also cited in 29 other documents
Department of Labor (EBSA)
Proposed Rules
  • 91 FR 16088Proposed Mar 31, 2026 — Fiduciary Duties in Selecting Designated Investment Alternatives Comments due Jun 1, 2026 (f)
  • 88 FR 75979Proposed Nov 3, 2023 — Proposed Amendment to Prohibited Transaction Exemption 2020-02 Comments due Jan 2, 2024
  • 88 FR 54511Proposed Aug 11, 2023 — Request for Information-SECURE 2.0 Reporting and Disclosure Comments due Oct 10, 2023 (d)(2)(h)(4)
  • 86 FR 57272Proposed Oct 14, 2021 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights Comments due Dec 13, 2021
  • 86 FR 51488Proposed Sep 15, 2021 — Proposed Revision of Annual Information Return/Reports Comments due Nov 1, 2021
  • 84 FR 56894Proposed Oct 23, 2019 — Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA Comments due Nov 22, 2019 (d)(d)(1)(d)(2)(d)(v)(h)(1)
  • 81 FR 47534Proposed Jul 21, 2016 — Proposed Revision of Annual Information Return/Reports Comments due Oct 4, 2016 (d)(2)
  • 81 FR 47496Proposed Jul 21, 2016 — Annual Reporting and Disclosure Comments due Oct 4, 2016
  • 80 FR 21928Proposed Apr 20, 2015 — Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice Comments due Jul 6, 2015 (f)
  • 80 FR 14334Proposed Mar 19, 2015 — Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans-Timing of Annual Disclosure Comments due Apr 20, 2015 (h)(1)
  • 79 FR 31893Proposed Jun 3, 2014 — Target Date Disclosure Comments due Jul 3, 2014
  • 78 FR 26727Proposed May 8, 2013 — Pension Benefit Statements Comments due Jul 8, 2013
  • 77 FR 30928Proposed May 24, 2012 — Target Date Disclosure Comments due Jul 9, 2012
  • 76 FR 19285Proposed Apr 7, 2011 — Request for Information Regarding Electronic Disclosure by Employee Benefit Plans Comments due Jun 6, 2011
  • 75 FR 70625Proposed Nov 18, 2010 — Annual Funding Notice for Defined Benefit Plans Comments due Jan 18, 2011
Final Rules
  • 90 FR 28009 Jul 1, 2025 — Removal of Definition of “Plan Assets”-Insurance Company General Accounts
  • 90 FR 28007 Jul 1, 2025 — Selection of Annuity Providers-Safe Harbor for Individual Account Plans
  • 89 FR 43636 May 17, 2024 — Abandoned Plan Regulations
  • 89 FR 32260 Apr 25, 2024 — Amendment to Prohibited Transaction Exemption 2020-02
  • 87 FR 73822 Dec 1, 2022 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights
  • 85 FR 82798 Dec 18, 2020 — Prohibited Transaction Exemption 2020-02, Improving Investment Advice for Workers & Retirees
  • 85 FR 72846 Nov 13, 2020 — Financial Factors in Selecting Plan Investments
  • 80 FR 5626 Feb 2, 2015 — Annual Funding Notice for Defined Benefit Plans (g)
  • 77 FR 5632 Feb 3, 2012 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure (d)(1)(d)(1)(i)(d)(1)(ii)(d)(1)(iii)(d)(1)(iv)(A)(d)(1)(iv)(B)
  • 76 FR 66136 Oct 25, 2011 — Investment Advice-Participants and Beneficiaries (h)
  • 75 FR 41600 Jul 16, 2010 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure (h)(1)
Advisory Opinions
  • AO 2023-01A — This advisory opinion concerns the application of ERISA’s fiduciary responsibility provisions to a Citigroup program that involves a commitment by Citigroup an… (h)(5)
IRS / Treasury
Proposed Rules
  • 89 FR 4215Proposed Jan 23, 2024 — Request for Information-SECURE 2.0 Section 319-Effectiveness of Reporting and Disclosure Requirements Comments due Apr 22, 2024
Final Rules

No court rulings in the library cite this provision yet.

No private letter rulings in the library cite this provision yet.

Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Jul 1, 2011Jun 30, 2012CFR 2011 annual edition (revised as of 2011-07-01) run 12775 FR 64937, Oct. 20, 2010View
Jul 1, 2012Jun 30, 2015CFR 2014 annual edition (revised as of 2014-07-01) run 12776 FR 42542, July 19, 2011View · Redline (sign in)
Jul 1, 2015Dec 31, 2016CFR 2016 annual edition (revised as of 2016-07-01) run 12780 FR 14304, Mar. 19, 2015View · Redline (sign in)
Jan 1, 2017currenteCFR editorial change effective 2017-01-01 run 280 FR 14304, Mar. 19, 2015View · Redline (sign in)
Provision-level history (blame)