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COLLECTED WISDOM™ on the DOLs 408(b) Final Fee Disclosure Regulations

On February 3, 2012, the Department of Labor published final regulations on fee disclosure for retirement plans. The final regulations represent the last step in a process that the DOL began in 2008 to expand disclosure of compensation paid to service providers to ERISA-subject plans. They become effective July 1, 2012. The regulations raise several important questions for plan sponsors and service providers that should be considered in order to implement compliance systems.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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408(b)2 Disclosures and the Fiduciary Rule

408(b)2 Provider Disclosures have created confusion for employers who sponsor 401k and 403b plans ever since the rules first requiring them took effect in 2012. This article seeks to clear up some of the confusion in the interest of helping employers stay compliant and ensure plan participants are well served.

Source: Alliant401k.com, November 2017

New Conflict of Interest FAQs Address 408(b)(2) Disclosure Transition Period

The 408(b)(2) FAQ will allow some service providers to avoid changing previously provided 408(b)(2) notices and give others additional time to adjust the content of those notices.

Source: Groom.com, August 2017

New Conflict of Interest FAQ

This FAQ provides information on (1) a "fiduciary status disclosure" issue under the DOL's ERISA section 408(b)(2) service provider disclosure regulation that applies to ERISA pension plans, (2) whether recommendations to plan participants and IRA owners to contribute to or increase contributions to a plan or IRA constitute fiduciary investment advice under the Fiduciary Rule, and (3) whether recommendations to employers and other plan fiduciaries on plan design changes intended to increase plan participation and contribution rates constitute fiduciary investment advice under the Fiduciary Rule.

Source: Dol.gov, August 2017

What's Your Fee Policy? Going Beyond 408(b)(2)

As fiduciaries, plan sponsors are responsible for making decisions related to selecting an appropriate fee structure. Establishing a comprehensive fee policy is a crucial step in making those decisions. It shows procedural discipline with regard to reviewing plan fees. Much like an investment policy, it also helps to maintain consistency of its policies by future committee members.

Source: Plantemoran.com, January 2015

ICI Comment Letter on DOL's Proposed 408(b)(2) Focus Group Study

In this 18 page comment letter, the Investment Company Institute expresses concern regarding the timing of the focus groups, the ICR design, and specific issues relating to the proposed focus group script.

Source: Ici.org, January 2015

Benchmarking -- All About That Fee

ERISA 408(b)(2) is designed to provide a responsible plan fiduciary with sufficient information to determine if fees are reasonable and conflicts are avoided. A practical approach to benchmarking fees in a manner that complies with 408(b)(2) is outlined here.

Source: Fraplantools.com, December 2014

DOL Planning RFI on 408(b)(2) Disclosure Effectiveness

The Department of Labor wants to request new industry input and form focus groups about the effectiveness of retirement plan service provider fee disclosure requirements. The DOL says a new information collection effort is needed to explore current practices and effects of a final regulation.

Source: Plansponsor.com, December 2014

Section 408(b)(2) Fee Disclosures: Dropping a Dime on Delinquent CSPs

Author recently made a presentation on ERISA Section 408(b)(2) regarding arrangements between a plan and a service provider. Attendees raised several questions that the author comments more broadly here.

Source: Erisafiduciaryadministrators.com, November 2014

Silver Lining in ERISA 408(b)(2)

David Witz provides a high level review of the business opportunity available to those that consult on ERISA 408(b)(2) in the fall issue of Plan Consultants. While most service providers abide by the rules and deliver their disclosures as required on time, other more entrepreneurial service providers are using 408(b)(2) as a means to build their business by assisting plan sponsors with their obligation to evaluate their disclosures to ensure they are complete.

Source: Fraplantools.com, October 2014

Impact of 408(b)(2) Guide on 403(b) Advisors

The DOL has issued numerous fee disclosure regulations in an effort to make fees more transparent for plan sponsors and hold them accountable as fiduciaries, a role that requires them to act prudently and for the benefit of plan participants and their beneficiaries. This article reviews the impact of these regulations on 403(b) Advisors.

Source: Ntsa-net.org, September 2014

The New Era of Fee Transparency: Making Sense of the Details

Assessing the reasonableness of fees as a result of 408(b)(2) regulations has put an increased burden on the already busy shoulders of retirement plan sponsors. Yet one of the most important fiduciary responsibilities of plan sponsors is to understand the services being provided and ensure that the fees charged to the plan are reasonable. This paper will help you build best practices for evaluating plan fees and determine whether you are striking a balance between the fees you pay and services you receive.

Source: Baml.com, September 2014

408(b)(2) Guide and More

The DOL recently issued a proposal to require a 408(b)(2) guide. The guide has also been referred to as a roadmap, but think of it as an index to the disclosures. This is the DOL's response to their review of provider disclosures and problems the DOL has seen. The DOL has at least two more significant concerns.

Source: Fredreish.com, April 2014

Can a Covered Service Provider Assess Their Own Services and Fees under 408(b)(2)?

Author thinks this a very interesting question as to which there is no definitive guidance from the DOL. With no specific DOL prohibition, they conclude that a CSP is free to provide an initial assessment of their fees and services to a Responsible Plan Fiduciary as long as the substance and the spirit of the 408(b)(2) regulations and other ERISA fiduciary duties are followed. However, a RPF must ultimately be the one to who signs off on the final assessment.

Source: Fraplantools.com, January 2014

408(b)(2): The Never Ending Story, or Area of Opportunity?

For some financial professionals, changes to Section 408(b)(2) of ERISA may have seemed like a one and done effort -- or even something someone else had to worry about. But, the story doesn't end there. The Department of Labor has already added a question to their audit checklist asking plan sponsors for all their 408(b)(2) disclosures. This likely means we'll be dealing with the ramifications for a long time. So, what can financial professionals do to prepare for (and make the best of) this on-going requirement?

Source: Principal.com, April 2013

401k Plans May Be Sitting Ducks: Will Regulations Compel DC Fiduciaries to Examine Their Own Conflicts of Interest?

Given the current economic malaise and the likelihood that 401k litigation will increase in volume and sophistication, sponsors and fiduciaries should realize that it is in their best of interest to not only seriously address several challenging questions, but also to document the steps they are taking to resolve them. If they don't do this, their non-compliance with the 408(b)(2) regulation will turn them into "sitting ducks" for clever and knowledgeable plaintiffs' litigators.

Source: Investmenthorizons.com, March 2013

Fee Information Has Been Delivered - Now What? The Aftermath of 408(b)(2)

To protect themselves against potential fiduciary liability, plan sponsors should conduct a fiduciary review of all plan fees and investment expenses as soon as practicable, if they have not done so already. The plan-level fee disclosures are an ideal starting point for such a review. A well-documented review of the reasonableness of these fees and expenses helps demonstrate that the plan sponsor has prudently fulfilled its fiduciary duties under ERISA.

Source: Wagner Law Group, March 2013

Top 10 Questions & Answers to Changes to Section 408(b)(2) of ERISA

Changes to the 408(b)(2) ERISA rules regarding service provider compensation reporting and disclosure have sparked a growing interest in the amount and reasonableness of compensation plans are paying to service providers, including financial professionals. Get tips to help show your clients the value of the important services you provide.

Source: Principal.com, February 2013

The Continuing Efficacy of Commission Disclosures Under PTE 84-24 After 408(b)(2)

Compensation paid on the sale of a financial product to a retirement plan, whether it is an insurance commission from the deposit to an annuity or from the payment of a 12b-1 fee related to the purchase of a mutual fund, is paid under a contract between the distributor and the financial service company. They are paid to promote the company's interests, not the plan's. The regs under 408(b) 2 never really addresses this sort of inherent conflict.

Source: Businessofbenefits.com, January 2013

Frequently Asked Questions About Service Provider Disclosure

The new service provider disclosure regulation (408b-2) provides that a contract will not be considered "reasonable" under ERISA unless certain information is disclosed by the service provider to the plan fiduciary regarding their services and the compensation they received or are expected to receive. The ICI has prepared this FAQ on the topic.

Source: Investment Company Institute, January 2013

Age of Reason: How to Evaluate Adviser Compensation Under 408(b)(2)

After investments, the second-highest cost for a 401k plan is usually the recordkeeper or bundled provider. As a result, once the 408(b)(2) disclosures are received, the new focus for many plan committees will be to evaluate that provider's compensation. Fred Reish shares some thoughts on the process.

Source: Drinkerbiddle.com, January 2013

Rule 408(b)(2): The New Fiduciary Paradox

Many believe that the 408(b)(2) & 404(a)(5) fee disclosure rules will provide a panacea for eliminating hidden or hard-to-find 401k fees. However, if plan sponsors do not actively engage in the fiduciary process, there will be an unintended consequence, one that may cost many plan sponsors dearly.

Source: Prudentchampion.com, December 2012

408(b)(2) Checklist

Responsible plan fiduciary duties under 408(b)(2) of the ERISA include: Determine if your plan is covered under the regulation, If yes, determine which service providers are covered, Verify you have received all of the required disclosures, Ensure the services are necessary and Determine the plan fees are reasonable. This is a checklist to help.

Source: Castle Rock Investment Company, December 2012

ERISA 408(b)(2) Checklist

Checklist of Covered Service Provider disclosure requirements ERISA §408(b)(2) regulations.

Source: DWS Investments, December 2012

408(b)(2) Checklist

A plan sponsor 408(b)(2) Checklist for Covered Service Providers.

Source: L.R. Webber Associates, December 2012

With 408(b)(2) Disclosures in Hand, What's Next?

This article focuses on specific actionable steps a responsible plan fiduciary must now take since the effective date of the plan disclosure rules has passed or what steps should be taken if a change in covered service providers occurs.

Source: FRAplantools.com, November 2012

Covered Service Provider Fee Disclosures -- Now What?

You received your 408(b)(2) disclosures from your covered service providers. Have you looked at them? Do you know what you are looking at? Do you know what you are supposed to do next? This article looks at the plan sponsor's responsibility with respect to the covered service provider fee disclosures.

Source: ERISAdiagnostics.com, November 2012

The Big Loophole in the DOL Fee Disclosure Regulations

401k fee disclosure has a big loophole in one of the largest asset classes. Stable value, or guaranteed funds, typically constitute 10-40% of assets in most 401k plans and have varied and complex structures which complicate fee disclosure. Billions of dollars in what I call spread based fees remain undisclosed under the new US Department of Labor fee disclosure rules.

Source: Stable Value Consultants, October 2012

Failure to Furnish Sponsor Fee Disclosure Under ERISA 408(b)(2) Has Significant Consequences

The arrangement between the plan and a Covered Service Provider (CSP) will not be treated as "reasonable," and hence will be a prohibited transaction, if a CSP fails to furnish the required disclosures, or if the CSP furnishes incomplete or inaccurate disclosures. This has consequences for both the responsible plan fiduciary and the CSP. To avoid engaging in a prohibited transaction, the responsible plan fiduciary should consider the action steps outlined here.

Source: ING, October 2012

The 408(b)(2) Trap for Plan Sponsors

Plan sponsors, and their officers who make 401k decisions, face lawsuits and penalties if they do not take steps to comply with new regulatory requirements. The Department of Labor's (DOL) 408(b)(2) regulation imposes two significant duties on plan sponsors. This article describes the two duties and generally discusses the steps that must be taken to comply with the regulation.

Source: Centre for Fiduciary Excellence, October 2012

Proper Advisor Benchmarking Values Facts Over Opinions

Plan sponsors that have hired an advisor without a documented process to support the hire are vulnerable to claims of fiduciary breach of loyalty and prudence as well as potential claims of self-dealing and conflicts of interest. Although not anticipated, ERISA 408(b)(2) and 404(a)(5) may become the death knell for lifetime members of the "good old boy network" that have relied on their relationships -- instead of the knowledge, experience and skill -- to secure retirement plan engagements.

Source: Fiduciary Risk Assessment, October 2012

Slicing and Dicing Retirement Plan Fees: Allocation Considerations for Plan Sponsors

In the wake of new fee disclosure rules, plan sponsors have increased their focus on how recordkeeping fees are allocated across participant populations. Beyond ERISA's general fiduciary requirements, there is limited legal guidance directly addressing how to allocate fees. This white paper addresses the fiduciary standards applicable to such allocation decisions.

Source: Vanguard, October 2012

Checklist for Retirement Plan Sponsors in Reviewing Fee Disclosures From Service Providers

While the DOL has not yet issued meaningful guidance as to what specific actions are required by responsible plan fiduciaries with respect to the service provider fee disclosure regulations that took effect on July 1, 2012, This checklist is a practical guide for responsible plan fiduciaries to address their initial obligation when they receive the relevant disclosures from service providers.

Source: Patterson Belknap Webb & Tyler LLP, September 2012

Managing Service Provider Disclosures Received - or Not - Under ERISA Section 408(b)(2)

Fiduciaries are now responsible for confirming that all appropriate disclosures have been received and that those disclosures contain all the information required by DOL regulations. They must send written requests for any missing information and report disclosure failures to the DOL. In some cases, fiduciaries will have to terminate contracts with service providers.

Source: Buck Consultants, August 2012

Fixing a 408(b)(2) Fee Disclosure Failure

By July 1, 2012, most plan fiduciaries and service providers complied with the Final 408(b)(2) Fee Disclosure Regulations by disclosing information about service provider compensation and potential conflicts of interest. For those that didn't, the Final 408(b)(2) Fee Disclosure Regulations require responsible plan fiduciaries to file a notice with the Dept. of Labor to obtain relief from ERISA's prohibited transaction provisions. On July 16, 2012, the DOL issued a Final Rule explaining where and how to file that notice.

Source: Pension Protection Act Blog, July 2012

DOL Improves Procedures for Plan Sponsors Seeking Relief Under New Fee Disclosure Rules

The U.S. Department of Labor's Employee Benefits Security Administration has announced improved procedures for plan sponsors who wish to obtain fiduciary relief for a service provider's failure to comply with the department's plan-level fee disclosure rule.

Source: U.S. Department of Labor, July 2012

408(b)(2) Disclosures: The Fun Begins Now!

July 1st has come and gone and 408(b)(2) disclosures should have officially been provided to plan sponsors. This is where it becomes interesting. Responsible plan fiduciaries must take action if their covered service providers did not provide the 408(b)(2) disclosure; the disclosure did not comply with the letter or spirit of 408(b)(2); or any problems uncovered could not be easily rectified. Any one of these problems will cause complications because ERISA 408(b)(2) does not give 401k plan sponsors much time to comply.

Source: Fiduciary Plan Governance, July 2012

A Twist to the "Amount Involved" In a 408(b)(2) Prohibited Transaction

The disclosures related to 408(b)(2) are really just a precursor to the next step: the imposition of the prohibited transaction taxes and penalties related to compensation which fails to meet those standards. It looks like the regs have the effect of shifting the application of the rules related to the "amount involved" in the transaction a bit.

Source: Businessofbenefits.com, July 2012

Service Provider Disclosure Regulations Get Slight Amendment

This amendment the mailing address and web-based submission procedures for filing certain notices under the DOL's fiduciary level fee disclosure regulation under section 408(b)(2) of ERISA. Responsible plan fiduciaries of employee pension benefit plans must file these notices with the DOL to obtain relief from ERISA's prohibited transaction provisions that otherwise may apply when a covered service provider to the plan fails to disclose information in accordance with the regulation's requirements.

Source: U.S. Department of Labor, July 2012

ERISA Service Provider Disclosures: What Plan Sponsors Need to Do Now

This Bulletin describes the steps that plan sponsors must take to review the disclosures they received, and how to proceed appropriately in cases where the disclosures were not furnished.

Source: Drinker Biddle & Reath LLP, July 2012

Behind 408(b)2's Looking Glass: Parties-In-Interest, Non-CSPs and Other Complex Tales

Beyond just understanding whether or not the fees disclosed are reasonable (a challenge in itself), the disclosures do something arguably more important: they take us behind the looking glass, opening a window to a world with which most are not familiar, but which is critical to the operation of 401k and 403(b) plans.

Source: Businessofbenefits.com, July 2012

What Happens If Disclosure Isn't Made As Required Under 408(b)(2)?

The covered service provider will be able to correct an error or omission as long as it was acting in good faith with reasonable diligence and it discloses the correct information as soon as practicable but no later than 30 days from the date it learns of the error or omission.

Source: Nyhart Actuary & Employee Benefits, June 2012

A 408(b)(2) Checklist for Reviewing Non-Registered Group Annuity Contracts

Variable non-registered group annuity contracts are not simple investments. They have a number of moving pieces which can make them a challenge to review for 408(b)(2) purposes. And many of the insurance company disclosures are far more complicated than need be. Here is a list of issues related to these products under 408(b)(2).

Source: Business of Benefits, June 2012

What 401k Plan Sponsors Can Expect from 408(b)(2) Service Provider Disclosures

Fiduciary News interviews several firms who fall under the definition of a 408(b)(2) "service provider" and asked them what they intend to do regarding disclosure. Unfortunately, these disclosures appear to promise only a mixed bag, leaving some 401k plans sponsors befuddled.

Source: Fiduciarynews.com, June 2012

The 408(b)(2) Fiduciary Conundrums: Defining, Implementing, and Monitoring Your 401k Plan's Value Proposition

The new 408(b)(2) fee regulations require 401k fiduciaries to make sure that the vendors' fees are "reasonable." Unfortunately, the term "reasonable" is not defined. So, what does it mean for a fee to be reasonable?

Source: Investmenthorizons.com, June 2012

The Final 408(b)(2) Regulation: Impact on Investment Managers

This bulletin discusses the impact of the U.S. Department of Labor's final 408(b)(2) disclosure regulation on discretionary investment managers -- that is, investment advisers with the authority to manage the assets of ERISA-governed retirement plans.

Source: Drinker Biddle & Reath LLP, May 2012

Fee Disclosure Guidance: Field Assistance Bulletin No. 2012-02

The DOL's 408(b)(2) fee disclosure regulation requires certain covered service providers to furnish specified information to plan administrators so that they may comply with their disclosure obligations in the participant-level disclosure regulation. This Bulletin supplements the participant-level disclosure regulation by providing guidance on some of the most frequently asked questions concerning the participant-level disclosure regulation and how it may be implemented.

Source: U.S. Department of Labor, May 2012

Provider Fee Disclosure FAQs

Over the past four years or so, the DOL has issued three sets of fee disclosure regulations directed at retirement plan service providers, all under ERISA § 408(b)(2). Even with all of the guidance from the DOL, questions and uncertainty abound. This is a FAQ to assist service providers in navigating the new world of fee disclosure.

Source: Faegre Baker Daniels, May 2012

Employer Fee Disclosure FAQs

To date, service providers have carried most of the load, studying the new fee-disclosure rules and preparing their own disclosure forms, but that is beginning to change. Retirement plan fiduciaries are starting to receive fee disclosures from their service providers, and in their capacity as plan fiduciaries, they have their own legal duties to review and understand the disclosures, object to those that don't comply, take the disclosures into account as they evaluate providers, and possibly replace providers. This is a FAQ to assist plan fiduciaries in carrying out their fee disclosure duties.

Source: Faegre Baker Daniels, May 2012

ERISA Fee Disclosures FAQs

While the new participant disclosure rules of ERISA § 404(a) apply only with respect to defined contribution plans, the service-provider disclosure rules of ERISA § 408(b)(2) apply equally to defined benefit plans. This is a FAQ intended to help investment and service providers, and plan sponsors, understand the new disclosure rules and understand what is required to comply with them.

Source: Faegre Baker Daniels, May 2012

Disclosing Changes Under the 408(b)(2) Regulations

With the exception of changes to the contract and the investment disclosures, the covered service provider does not need to provide additional disclosures until the contract is extended or renewed. This article discusses the timing of the disclosures for changes.

Source: Sungard/Relius, April 2012

Investment Disclosures Under the Final 408(b)(2) Regulations

The final fee disclosure regulations established a significant link between the service provider and the participant fee disclosure regulations. Under the final regulations, a covered service provider responsible for investment disclosures to a fiduciary in a participant-directed plan must provide the information that the plan administrator must disclose to participants. This article helps explain the investment disclosure requirements.

Source: Sungard/Relius, March 2012

Benefits Briefing Presentation Slides: 408(b)(2) Fee Regulations

Slides from a presentation by Jan Jacobson, Senior Counsel, American Benefits Council, Robert Doyle, Prudential Financial, and Michael L. Hadley and Kent Mason, Davis & Harman LLP. Covers what is a 408(b)(2) disclosure, which types of plans must receive this disclosure, which service providers must provide the disclosure and more.

Source: American Benefits Council, March 2012

Plan Sponsors Run Risk of Missing the Point of 408(b)(2)

Much has been written over the past months dealing with the new 408(b)(2) regulation which goes into effect on July 1. Much of it has been from the perspective of plan vendors, not plan sponsors. Consequently, many sponsors are running a real risk of a prohibited transaction by missing two simple but very critical points of this regulation.

Source: Dover Consulting, March 2012

The Party-In-Interest Threshold to the "Edges" of 408(b)(2)

Though the 408(b)(2) will apply to a significant part of very common transactions and relationships, there are a number of them where the answer is not so clear. And, as with other eccentric prohibited transaction matters, a close look at the particular facts will be determinative.

Source: Business of Benefits, March 2012

DOL Issues Final Fee Disclosure Rule

Many vendors have updated or are in the process of updating their service agreements and materials to incorporate the final rule. The plan fiduciaries under the rule, however, should not accept these contracts at face value. While vendors will likely develop the means of complying with the final regulation, plan fiduciaries are advised to establish a checklist and timeline.

Source: Littler Mendelson PC, February 2012

What Responsible Fiduciaries and Service Providers Need to Prepare for Regarding Disclosure Regulations

On February 3, 2012, the DOL published final regulations on fee disclosure for retirement plans. The Final Regulations raise several important questions for plan sponsors and service providers that should be considered now in order to implement compliance systems by July 1, 2012.

Source: Orrick Compensation & Benefits Group, February 2012

Final Regulation Relating to Service Provider Disclosures Under Section 408(b)(2)

The DOL published a fee disclosure interim rule on July 16, 2010. This final rule replaces the interim rule with minor changes and revisions. This final rule establishes specific disclosure obligations for plan service providers to ensure that responsible plan fiduciaries are provided the information they need to make better decisions when selecting and monitoring service providers for their plans.

Source: U.S. Department of Labor, February 2012

Changes to Final DOL Fee Disclosure Rule

The operative language of the final 408b-2 service provider fee disclosure rule reflects certain modifications to the interim final rule that was published in the Federal Register on July 16, 2010. The major changes are described here, with citations to the relevant provisions of the final rule.

Source: U.S. Department of Labor, February 2012

Reasonable Contract or Arrangement Under Section 408(b)(2) -- Fee Disclosure

This document contains the full text of the final regulation under ERISA requiring that certain service providers to pension plans disclose information about the service providers' compensation and potential conflicts of interest. These disclosure requirements are established as part of a statutory exemption from ERISA's prohibited transaction provisions. This regulation will affect pension plan sponsors and fiduciaries and certain service providers to such plans.

Source: U.S. Department of Labor, February 2012

DOL Issues Final Fee Disclosure Rule

Many vendors have updated or are in the process of updating their service agreements and materials to incorporate the final rule. The plan fiduciaries under the rule, however, should not accept these contracts at face value. While vendors will likely develop the means of complying with the final regulation, plan fiduciaries are advised to establish a checklist and timeline.

Source: Littler Mendelson PC, February 2012

DOL Issues Final Regulations on 408(b)(2) and 404(a)(5)

On February 2, 2012, the Department of Labor (DoL) finalized regulations under ERISA Section 408(b)(2) and 404(a)(5). The final regulations come as a relief to employers and plan providers who have anxiously awaited final clarity on the exact method and format with which to deliver all the required information. Beyond merely delaying the implementation of the new reporting requirements, we now have a clear understanding of how the regulations will work.

Source: Employee Benefit Solutions, February 2012

New Rules Wreak Havoc for Retirement-Plan Sponsors

The Department of Labor finally issued long-anticipated final regulations requiring retirement-plan service providers to disclose to employer-plan sponsors all of their direct and indirect compensation and potential conflicts of interest. The requirements put both the plan sponsors and investment management fiduciaries (often CFOs) in a conundrum.

Source: CFO.com, February 2012

Not Paying to Attend Seminars and the New DOL Fee Disclosure Regs

Do you ever have a vendor defray or subsidies the costs of a conference that the service provider offers its clients? If so, that may fall under the DOL's Fee Disclosure regs.

Source: Pension Protection Act Blog, February 2012

Six Misconceptions Plan Sponsors Have About the Fee Disclosure Regulations

If the plan sponsor is happy with their providers, they don't have to determine whether the fees are reasonable, and other misconceptions.

Source: Rosenbaum Law Firm Blog, February 2012

New Fee Disclosure Rules Create Unintended Consequences

All covered service providers including advisors will be required to provide a responsible plan fiduciary with a written description of their services rendered for compensation received by July 1, 2012. This requirement represents a nuisance for many that have fully divulged their fees and services in the past, but for many others, 408(b)(2) is a nuclear bomb with potentially dire consequences. How so? Consider the following three advisor scenarios.

Source: FRA/PlanTools, February 2012

Finally the Final 408(b)(2) Regulation

The Department of Labor has issued the long-anticipated final service provider fee disclosure regulation. In finalizing the regulation, the DOL extended the compliance deadline from April 1, 2012, to July 1, 2012. In this article, Fred Reish and Bruce Ashton describe what the amendment says and what they think are the most important changes.

Source: Drinker Biddle & Reath LLP, February 2012

Labor Department Changes Tack on 401k Fee Disclosure

The U.S. Labor Department has removed a controversial part of its proposed 401k fee disclosure rule that would have required retirement plan providers to create a summary document, or "roadmap," of all their fees for employers.

Source: Financial-planning.com, February 2012

Final DOL Reg Could Bring Big Change to Retirement Industry

Big shifts may be coming in how retirement plans are managed after the Labor Department announced the final version of its rules under Section 408(b)(2) of ERISA, which require broker dealers disclose their services and fees to plan sponsors for individual plans.

Source: Employee Benefit News, February 2012

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