The Department of Labor’s Employee Benefits Security Administration (EBSA) has launched a website enabling retirement plan fiduciaries to electronically inform the DOL of a service provider’s failure to disclose fee information, as required under the agency’s fee disclosure rule. The ERISA Section 408(b)(2) fee disclosure rule outlines the disclosures that a covered service provider must furnish to a covered plan fiduciary so that the fiduciary can assess whether the contract for services to the plan is reasonable. If the service provider fails to make the necessary disclosures, the contract or arrangement entered into between the plan and service provider is deemed unlawful under ERISA, and the responsible plan fiduciary will be considered to have engaged in a prohibited transaction.
The rule includes a prohibited transaction class exemption provision whereby “innocent” responsible plan fiduciaries may seek relief from ERISA’s prohibited transaction rules for unknowingly receiving incomplete or incorrect disclosures from a covered service provider. In order to avail itself of this class exemption, the responsible plan fiduciary must meet certain conditions, including filing a notice with the DOL concerning the covered service provider’s failure to make complete and correct disclosures.
More information on the fee disclosure failure notice can be found here.