Beginning July 1, plan fiduciaries must be sure service providers disclose fee information required by DOL regulation
25 June 2012Executive Compensation, Employee Benefits, and Share Incentives Newsletter
This client alert summarizes a regulation issued by the United States Department of Labor that requires certain persons that provide services to tax-qualified retirement plans and 403(b) plans, including but not limited to fiduciaries, investment advisers and certain recordkeepers, to disclose detailed information regarding their fees and other compensation to plan fiduciaries. The regulation also requires the plan fiduciaries that hire the service providers to review the disclosures to make reasonably sure they are complete, and follow up with the service providers if they are not. The regulation goes into effect July 1, 2012, and disclosures for existing arrangements are due on or before that date. Fiduciaries should review the information they receive, or follow up if no information or incomplete information is received, promptly after that date. Failing to comply with these requirements could turn arrangements into “prohibited transactions” under ERISA, with adverse consequences to the parties involved as well as the plan.