4153 / To what plans do the 404(a)(5) participant fee disclosures apply?

To meet their fiduciary duties, the plan administrator of “covered individual account plans” must comply with the disclosure requirements of Section 404(a)(5).

Covered individual account plans include any defined contribution plan (as defined by Section 3(34) of ERISA) which permits plan participants or beneficiaries to direct investment of their plan assets. If a plan participant or beneficiary is permitted to direct only a portion of their account balance, while another portion of the account balance is trustee directed, the plan fiduciary need only comply with the disclosure requirements with respect to the assets that the plan participant has the right to direct.

SEPs, SIMPLEs, and defined benefit plans are not subject to these disclosure requirements.

The disclosures must be made to the plan participants or beneficiaries who have the right to direct their investments under the plan.