The Department of Labor (the “DOL”) issued Field Assistance Bulletin 2009-3 under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This advisory opinion addresses the prospectus delivery requirement for participant-directed retirement plans, including so-called 401(k) plans, that are intended to comply with Section 404(c) of ERISA. Section 404(c), if satisfied, relieves all plan fiduciaries of any responsibility for the participants’ investment directions. Among other things, Section 404(c) requires that a mutual fund prospectus be delivered to each participant either immediately before or immediately after a participant’s initial investment in the mutual fund. In this advisory opinion, the DOL concludes that the delivery of a mutual fund’s “Summary Prospectus” satisfies the prospectus delivery requirement under Section 404(c) of ERISA. The Summary Prospectus is a recently introduced short-form “plain English” disclosure document that may be used as an alternative to the full blown statutory prospectus to satisfy prospectus delivery requirements under the federal securities laws in connection with mutual fund sales, as discussed in the January 20, 2009 Alert.
Alert September 15, 2009