Background

The SECURE 2.0 Act (SECURE 2.0) was enacted on December 29, 2022 as part of the Consolidated Appropriations Act, 2023. SECURE 2.0 was a follow-up to the earlier SECURE Act and contains numerous individual provisions. (For an overview of SECURE 2.0’s provisions, see our January 4, 2023 insight, “SECURE 2.0 Retirement Reform Becomes Law.”) Some of those provisions require the DOL to issue guidance on disclosure to participants and may involve the DOL developing model notices.

SECURE 2.0 also requires the DOL, the Treasury Department and the PBGC to conduct a broad review of existing reporting and disclosure requirement and how to simplify and make more understandable existing disclosures. That broad study is not addressed in this RFI.

Questions

In general, in the RFI, the DOL is asking plan sponsors and participants:

• What information do you now give and can some of it be eliminated?
• What information that is not given now should be required to properly inform participants?
• Would it be helpful (in some cases) for the DOL to provide a model notice and, if so, can you provide a sample model notice?

However, the questions are broken down into nine topics (covering 11 provisions of SECURE 2.0).

SECURE 2.0 topics addressed in the RFI

The topics addressed and example questions are as follows:

• Pooled employer plans (section A, questions 1–6). What are good data sources for the DOL to gather information on pooled employer plan fees, investment options and existing disclosures?
• Pension-linked emergency savings accounts (section B, questions 7–8). What guidance is needed from the DOL? Would a model disclosure document help and, if so, what should it say?
• Performance benchmarks for asset allocation funds (section C, questions 9–10). Is there information, beyond what is currently required to be provided to participants, that would be helpful and, if so, what information?
• Fee disclosure improvements for DC plans (section D, questions 11–13). What information that is now provided is useful and what additional information would be useful?
• Reduction in notices to participants who do not enroll in a 401(k) (section E, questions 14–18). Is more information needed to help determine who is an unenrolled participant? Which notices should be required? Which are not necessary? Would a special model notice be helpful and, if so, what should it say?
• Requirement to provide a paper benefit statement (section F, questions 19–21). How should existing requirements and electronic safe harbors be changed to implement the new requirement?
• Consolidation of DC plan notices (section G, question 22). Which notices should be consolidated and what are the benefits and harms for plans and participants?
• Information needed for financial options risk management (section H, questions 23–28). What information is needed beyond what is already required for lump sum election windows? What information should be contained in the pre- and post-election notices to the DOL and PBGC?
• Information on single-employer DB annual funding notices (section I, questions 29–31). Would multiple funding ratios based on different value measures and different dates be helpful or be confusing? How should the existing model notice otherwise be modified?

What’s next?

The RFI is just the DOL’s preliminary step in gathering information to address the changes in law. After reviewing the information provided, the DOL will propose regulatory guidance and model language. It will ask for comments on the proposals and models.

It is also worth noting that separate from this RFI, the DOL, in combination with the IRS and the PBGC is required to look at existing disclosure requirements with an eye to making them easier to understand and less burdensome.