DOL Delays Retirement Plan Fee Disclosure Rule Until 2012: But plan sponsors and service providers still have lots to do in 2011

more+
less-

The Department of Labor (DOL) recently announced that its 2010 “interim final” rule for plan service providers to disclose their fees will not take effect July 16, 2011, as previously planned. Instead it will be delayed until Jan. 1, 2012, while the DOL works on a “final” rule. The final rule will then apply to both new and existing service provider contracts.

The service provider fee disclosure rules, also known as “408(b)(2)” rules, are designed to help plan fiduciaries fulfill their duty to ensure that retirement plans and plan participants are charged no more than “reasonable” fees by plan service providers. Otherwise, both the service provider and the fiduciaries can be subject to sanctions for allowing a “prohibited transaction” to occur.

The rules cover plan service providers, such as trustees, recordkeepers, third-party administrators, brokers, and investment advisors. They require providers to disclose to the plan, in advance, the fees they will receive, both from direct charges to the plan or plan accounts, and indirectly from revenue sharing and through relationships with other providers. This will require providers to tease out and disclose fees that may be hidden in a “bundled” platform, so that plan administrators can better monitor and compare them.

These rules will apply to all defined benefit and defined contribution plans, regardless of size, and to all providers that will receive at least $1,000 directly or indirectly from the plan.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Davis Wright Tremaine LLP | Attorney Advertising

Written by:

more+
less-

Davis Wright Tremaine LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×