Finalized 408(b)(2) Regulations Issued!

Posted on Feb 02, 2012 by  in Changes in the Law: What You Should Know, In the News

Today, the U.S. Department of Labor (DOL) released the long-awaited final 408(b)(2) service provider disclosure regulations. The final regulations will become effective on July 1, 2012, a three-month delay from the previous April 1 deadline.

These regulations, issued under ERISA § 408(b)(2), require most service providers for retirement plans to disclose to plan fiduciaries comprehensive information about their arrangements with the plan including information regarding fees and possible conflicts of interest. More specifically, covered service providers must describe in writing (1) the services that they intend to provide to the plan, (2) whether the service provider intends to assume a fiduciary role with respect to the plan, and (3) the costs and fees associated with the provision of services. The DOL intends that plan sponsors use this information to evaluate the reasonableness of the arrangement and the fees paid to the service provider.

The final regulations contain some changes from the interim final regulations that were published back in July of 2010. While most of the changes appear to be definitional and relatively minor, the final regulations reserve a place for a “guide” to the initial disclosures which would be used to help plan fiduciaries locate information contained in the disclosures. In the preamble to the final regulations, the DOL has indicated that it will publish a proposed rule regarding this guide in the near future. The final regulations contain a sample guide as an appendix.

It is worth noting that along with the delayed effective date of the 408(b)(2) service provider disclosure regulations, the effective date of the 404(a) participant disclosure regulations has also been delayed. Under those regulations, the initial annual notice must now be provided on or before August 30, 2012.

One Response to “Finalized 408(b)(2) Regulations Issued!”

  1. [...] EBSA sets effective dates for fiduciary-level fee disclosure and participant-level fee disclosure regsERISA Update: Department Of Labor Issues Final Fee Disclosure Rule: Important Information For Plan SponsorsNew Fee Disclosure Regulations: What Plan Sponsors Need to KnowFinal 408(b)(2) Regulations Issued [...]

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