The Securities and Exchange Commission (SEC) issued a Staff No-Action letter allowing non-Employee Retirement Income Security Act (ERISA) retirement plan advisers and service providers to furnish participants with fee disclosures without running afoul of an SEC rule.
SEC Rule 482 provides parameters around information provided by an investment company that could be classified as advertisements. In a Staff No-Action Letter to the U.S. Department of Labor (DOL) in 2011, the SEC agreed to treat specified investment-related information provided to participants and beneficiaries in participant-directed individual account plans, as required by Section 404a-5(d) of ERISA as if it were a communication that satisfies the requirements of Rule 482 under the Securities Act of 1933.
The American Retirement Association, formerly ASPPA, and Groom Law Group, wrote a letter asking the SEC to extend the same treatment to non-ERISA plans. The letter pointed out that participants in non-ERISA plans would also benefit from fee disclosures.
The SEC said its No-Action letter applies not only to non-ERISA 403(b) plans, but also to governmental 457(b) plans, governmental 401(a) plans, 415(m) plans, church 401(a) plans, non-governmental 457(b) plans, and 409A plans or 457(f) plans of governmental or tax-exempt entities.
The original No-Action letter and the letter to the SEC from the American Retirement Association and Groom Law Group can be accessed here.