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Department of Labor Releases Final Regulations Regarding Service Provider Fee Disclosure

The DOL has issued final regulations mandating that certain service providers to ERISA-covered retirement plans disclose to plan administrators and other responsible plan fiduciaries detailed information about their fees, services and potential conflicts of interest. The deadline to disclose this information (for both existing and new service arrangements) is July 1, 2012.

A plan administrator must confirm that it has received all information required by the regulation and, if necessary, follow up with the service provider(s) for any missing information. If a service provider is not responsive, the plan administrator must then notify the DOL. If the required information is not provided and a plan administrator does not follow these procedures, the relationship with the service provider will be deemed a prohibited transaction, and excise taxes and other penalties may apply.

Sponsors of participant-directed individual account plans in turn are required to pass on this information, as well as other detailed invested-related information, to plan participants. The July 1 deadline for service providers means that plan sponsors have until August 30, 2012 to provide participants with this information. The first quarterly disclosure following the initial disclosure is then due by November 14, 2012 (for calendar year plans).

© 2020 Schiff Hardin LLPNational Law Review, Volume II, Number 95


About this Author

Schiff Hardin represents management in labor matters and employment-related litigation, and provides counsel to employers with respect to all legal aspects of employer-employee relations. Our firm's labor law practice encompasses both the private sector and the public sector for large and small employers in a broad range of markets and industries. Our Labor and Employment Group works cooperatively with attorneys in our Employee Benefits and Executive Compensation Group to provide our clients with comprehensive assistance in every aspect of the employer-employee relationship.