CPA & Business Advisory Blog

Employee Benefit Plan Commentator: Winter 2012

This month's issue of Employee Benefit Plan Commentator includes the following articles:

Final Fee Disclosure Regulation Issued

In the Fall 2011 Edition of the EBP Commentator, we helped navigate you through the new and upcoming fee disclosures.

With the final regulations under ERISA §408(b)(2) disclosure rules just released by the Department of Labor (DOL), we wanted to alert you to the key features of the final regulations (as well as changes from the earlier, interim final version). Additionally, we’re going to recap the upcoming 404(a)(5) participant disclosures and how those disclosures have been impacted by this final regulation. Lastly, we’ll discuss how all of this impacts your fiduciary responsibility and offer some practical suggestions you can begin to implement right away!

408(b)(2) Final Regulation – Really it's Final

Released on Feb. 2, 2012, the DOL final regulation under 408(b)(2) is intended to help plan sponsors/fiduciaries understand the administrative and investment costs being paid from their plan’s assets. Under the regulation, a covered service provider is required to provide the plan fiduciary with the necessary information to allow the fiduciary to assess the reasonableness of the indirect and direct compensation that the service provider, its affiliates and/or subcontractors receive related to the plan; identify potential conflicts of interest; and satisfy reporting and disclosure requirements under Title I of ERISA.

Click here to read more about the 408(b)(2) final regulation.

There's More to Come – Participation Disclosures

As you’re reviewing the disclosure information from your service providers under the 408(b)(2) regulations, don’t forget that the plan sponsor/fiduciary is required to provide disclosure of this information (and more) to plan participants! These 404(a)(5) disclosures to the participants require the plan sponsor/fiduciary to disclose fees and expenses paid from the plan’s assets, as well as information quarterly regarding the fees and expenses actually deducted from the participant’s account during the quarter.

Click here to read more about participation disclosures.

Remember Your Fiduciary Responsibilities

As the fiduciary, you’re requiredto know what fees the plan pays so that you only allow reasonable fees to be paid from plan assets. You must also adhere to a very high standard of care, skill, prudence and due diligence in performing your responsibilities (and this includes the fees that you allow the plan to pay).

Click here to read more about fiduciary responsibilities.

For more information on employee benefits planning contact Dani Gisondo at 440-449-6800.

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