Fee Disclosures
As discussed above, there are enhanced fee disclosure requirements on the Schedule C. The revised schedule will require fees
charged by service providers to administer the plan to be classified as either direct or indirect compensation, as well as reporting persons in a conflict of interest sensitive position who received eligible indirect compensation. Direct compensation is defined as compensation
paid directly by
the plan
to the service provider, such as recordkeeping fees and custodial fees. These fees should be relatively easy to identify and disclose. Indirect compensation is compensation paid by sources other than directly from the plan, such as fees charged to investment funds and reflected in the value of the plan’s investments or return on investment. These fees will be more challenging to identify and disclose.
The DOL’s Employee Benefits Security Administration (“EBSA”) has released frequently asked questions (“FA Q”) to help plan administrators and service providers comply with the new Schedule C requirements. The FA Qs cover such issues as the alternative reporting option for eligible indirect compensation, electronic disclosure of fee information by service providers, fee reporting for brokerage window options in participant directed plans, and reporting on gifts, entertainment and other non-monetary compensation.
These FAQs can be found at, http://www.dol.gov/ebsa/faqs/faq_schedulec.html and http://www.dol.gov/ebsa/faqs/faq-sch-csupplement.html.
Information courtesy:
