New Service Provider Disclosure Requirements effective April 2012
In 2012, Plan Fiduciaries must submit requests for written information and disclosures to their Service Providers. DOL Final Interim Rule, issued July 16, 2010 and effective April 1, 2012, requires Service Providers for covered plans, including defined contribution and defined benefit pension plans, to provide written disclosures of their compensation and other mandatory information to the Plan Fiduciaries within 30 days of a written request. Plan Fiduciaries are required to notify the DOL if the information is not timely provided. Service Providers subject to this rule include investment managers and investment consultants. Plan attorneys, accountants, third party administrators, and custodians are generally not subject to these requirements, unless they receive indirect compensation. The purpose of these requirements is to insure Plan Fiduciaries have enough information to determine if their Service Providers’ contracts are reasonable for the services provided, as ERISA requires. Plan Fiduciaries’ compliance will provide them with a Prohibited Transaction class exemption. Final Regulations are expected from the DOL by year end with no change in effective date. For more information on the new service provider disclosure requirements, please contact your Trust Fund counsel.
Author: Ashley K. Ikeda
