In the ongoing saga of retirement plan fee disclosure, the DOL joined the fray by issuing proposed regulations addressing the requirements for contracts between service providers and employee benefit plans. Under the guidance, contracts and arrangements between such plans and certain service providers must be "reasonable" and include provisions that will ensure the disclosure of information to assist fiduciaries in assessing the reasonableness of the fees paid for services. The terms of the contract must identify all compensation that will be received either directly from the plan or indirectly from parties other than the plan or plan sponsor (including "bundled" fees). Potential conflicts of interest that could affect the service provider's performance must also be disclosed. The DOL also released a companion prohibited transaction exemption which provides relief to responsible plan fiduciaries when a service provider fails to comply with the disclosure requirements. See Prop. Labor Reg. 2550.408b-2(c)(1).
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DOL releases guidance on fee disclosure
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