Spring 2012

Service Provider Fee Disclosures

Deadline

July 1, 2012 for both new and existing arrangements

Next Steps for Responsible Plan Fiduciaries

  1. Identify the service providers to which the service provider disclosure rules apply and notify them that you expect them to comply fully and timely.
  2. Institute a plan and timeline to confirm that all required disclosures have been provided to the applicable plan fiduciaries.
  3. Review all service provider disclosures to ensure that sufficient information has been provided in compliance with the rules and to assess the reasonableness of the compensation paid under the service provider agreement.
  4. Establish a process for follow-up with a service provider and/or notification to the DOL if adequate information is not provided.
  5. Analyze the disclosures and consider whether the fees charged are competitive and/or reasonable. As part of the analysis, consider whether to issue a request for proposal or request for information to compare different service providers, or whether to renegotiate certain agreement terms.
  6. Establish ongoing processes to monitor and analyze the disclosures for purposes of determining whether the compensation paid to service providers is reasonable.
  7. Document the review process and decisions made by the plan administrator or other fiduciary during the review.

Participant-Level Fee Disclosures  

Click here to view table

Next Steps for Responsible Plan Fiduciaries

  1.  Identify the benefit plans for which participant disclosures must be provided and the participants and beneficiaries who must receive the disclosures.
  2. Determine who will draft and/or distribute the disclosures (e.g., the recordkeeper, plan administrator or other fiduciary).
  3. Review the service provider disclosures to ensure that all information relevant for the participant disclosures has been provided. (Note, this may involve some coordination if there are multiple service providers.)
  4. Coordinate with the service providers to determine who will distribute the disclosures and in what form (e.g., electronic delivery, incorporated into the summary plan description).
  5. Consider whether to provide additional participant education or communications in connection with the initial disclosures.
  6. Establish ongoing processes to monitor the preparation and distribution of participant disclosures.
  7. Document the review process and decisions made by the plan administrator during the review.