The U.S. Department of Labor recently announced proposed changes to plan expense disclosure regulations under Employee Retirement Income Security Act (ERISA) Section 408(b)(2) that would mandate the use, in some cases, of a guide to the often-complex disclosure documents provided by many covered service providers.
ERISA Section 408(b)(2) requires certain service providers of qualified retirement plans to disclose information about the service provider's compensation and potential conflicts of interest.
The proposed amendment would require covered service providers who make their disclosures through multiple or lengthy documents to furnish a guide to the documents. The guide will be required to specifically identify where in the disclosure documents fiduciaries can find:
- The description of services to be provided
- The statement concerning services to be provided as a fiduciary and/or as a registered investment adviser
- The description of all direct and indirect compensation, any compensation that will be paid among related parties, compensation for termination of the contract or arrangement and compensation for recordkeeping services
- The required investment disclosures for fiduciary services and recordkeeping and brokerage services, including annual operating expenses and ongoing expenses, or, if applicable, total annual operating expenses.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
