True or false: SIMPLE IRAs and SEPs are exempt from the 404(a)(5) disclosure requirements.

The statement is true. SIMPLE IRAs (Savings Incentive Match Plan for Employees Individual Retirement Accounts) and SEPs (Simplified Employee Pension plans) are indeed exempt from the disclosure requirements specified under section 404(a)(5) of the Employee Retirement Income Security Act (ERISA).

Section 404(a)(5) requires certain plan sponsors to provide disclosures regarding plan fees and performance to participants, but SIMPLE IRAs and SEPs are not classified as traditional employer-sponsored retirement plans. Therefore, they do not fall within the same regulatory framework that mandates these disclosure requirements for plans such as 401(k)s. This distinction emphasizes the specific regulatory requirements associated with different types of retirement plans, as SIMPLE IRAs and SEPs are designed to be simpler and easier to manage, often appealing to smaller businesses or self-employed individuals.