DOL Issues Request for Information on SECURE 2.0 Reporting and Disclosure Requirements

On August 11, 2023, the DOL published a request for information (RFI) soliciting public comments on certain SECURE 2.0 provisions that impact ERISA’s reporting and disclosure framework. The public feedback will inform future DOL rulemaking or other guidance.

Numerous sections of SECURE 2.0 establish new, or revise existing, ERISA reporting and disclosure obligations. In some cases, SECURE 2.0 also requires the DOL to undertake a review of existing or new requirements and submit reports to Congress on their findings.

Accordingly, the RFI is comprised of questions on specific topics affected by SECURE 2.0 reporting and disclosure changes, including:

1. Pooled Employer Plans (PEPs). Section 344 of SECURE 2.0 directs the DOL to study the PEP industry and report their findings to Congress and the public every five years, with recommendations on how PEPs can be improved through legislation. The RFI seeks data sources to perform this study, including information on PEP selection and monitoring, investment ranges and fees, and participant disclosures.
2. Pension-linked Emergency Savings Accounts (PLESAs). Section 127 of SECURE 2.0 amended ERISA to add PLESAs. PLESAs allow non–highly compensated employees in section 401(k), 403(b), or governmental 457(b) plans to make after-tax Roth contributions to a separate account and withdraw from that account to pay for unexpected short-term emergency expenses. If a plan offers PLESAs, the employer must provide participants with initial and annual disclosures that explain the PLESA’s purpose, limits, tax treatment, investment options, fees, contributions and withdrawal process, among other items. The RFI asks whether employers need further guidance to implement PLESAs and whether they would benefit from model notices to comply with disclosure obligations.
3. Performance Benchmarks for Asset Allocation Funds. Section 318 of SECURE 2.0 specifies criteria for blended performance benchmarks applicable to designated investment alternatives that contain mixed asset classes. The RFI asks if additional factors should be included to ensure employers and participants can effectively use the benchmarks and how to assess participants’ understanding of the benchmarks.
4. Defined Contribution Plan Fee Disclosure Requirements. Section 340 of SECURE 2.0 requires the DOL to review and report on ERISA 404a-5 disclosure requirements in participant-directed individual account plans. The report must include recommendations for legislative changes to help participants better understand defined contribution plan fees and expenses, including the cumulative effect over time. The RFI seeks comments on the adequacy of the current disclosures and changes to the content, design, format, or delivery method that may improve the effectiveness.
5. Eliminating Unnecessary Plans Requirements Related to Unenrolled Participants. Section 320 of SECURE 2.0 amended ERISA to eliminate disclosure obligations to unenrolled employees, except for an annual reminder notice of their plan eligibility and election deadlines or if the disclosure is requested. The RFI asks whether employers need additional guidance, such as a model annual notice, to implement this change.
6. Requirement to Provide Paper Statements in Certain Cases. Section 338 of SECURE 2.0 directs the DOL to update their 2002 electronic delivery safe harbor to provide that employees who first become eligible to participate after December 31, 2025, must be furnished a one-time initial paper notice of their right to request all ERISA documents in paper form prior to the electronic delivery of any pension benefit statement. The RFI seeks input on any needed updates to existing electronic delivery rules to effect this requirement and whether an employer’s continued use of electronic delivery should be conditioned on access in fact (meaning the employer’s verification that an individual has accessed the document).
7. Consolidation of Defined Contributions Plan Notices. Section 341 of SECURE 2.0 requires the DOL and IRS to issue regulations providing that plan administrators may consolidate certain notices, such as notices for qualified default investment alternatives, automatic contribution arrangements, and nondiscrimination safe harbors. The RFI seeks input regarding any current legal impediments to consolidation and the pros and cons of such an approach.
8. Information Needed for Financial Options Risk Mitigation. Section 342 of SECURE 2.0 changed disclosure rules for defined benefit pension plans that offer lump sum payments. The new rules require plans to provide certain information to participants before the lump sum becomes available, such as the value of the lump sum relative to annuities available under the plan, the interest rate and mortality figures used to calculate the lump sum and the related tax implications. The DOL must develop a model notice for this purpose. The RFI asks for sample model notices and whether additional implementation guidance is needed.
9. Defined Benefit Annual Funding Notice. Section 343 of SECURE 2.0 modifies the content requirements for defined benefit plan annual funding notices. The RFI seeks certain input regarding the content requirements and suggestions for updating the existing funding notice to reflect the changes.

Employers that sponsor retirement plans should be aware of this RFI. Those wishing to submit comments to the DOL for consideration must do so by October 10, 2023, in accordance with the specific RFI instructions.

Federal Register: Request for Information-SECURE 2.0 Reporting and Disclosure »