In 2012, the role of a retirement plan sponsor will change forever. The plan sponsor fee disclosure known as the Section 408(b)(2) regulation requires a plan sponsor to collect fee information from “covered service providers” that receive $1,000 or more from the plan for services. This regulation will go into effect on July 1, 2012.
The participant fee disclosure or what is known as the Section 404(a)(5) regulation requires plan sponsors to provide information to participants for plans that are covered by ERISA and have the investments directed by the participants. This regulation will go into effect on September 1, 2012. The problem is that most plan sponsors don’t understand their responsibilities when it comes to both regulations because they have misconceptions of what the regulations really mean and their role in following them. This article’s intent is to debunk the misconceptions plan sponsors have about both sets of fee disclosure regulations.
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