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The final regulations represent the last step in a process that the DOL began in Abstract: (b)2 Provider Disclosures have created confusion for employers. This document contains a final regulation under the Employee Retirement Income Security Act of (ERISA or the Act) requiring that certain. This bulletin discusses the impact of the U.S. Department of Labor’s (DOL) final (b)(2) disclosure regulation on discretionary investment managers – that is.

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I is a professional investment adviser in which E has no interest which may affect the exercise of E’s best judgment as a fiduciary. The amendment affects participants and beneficiaries of plans, IRA owners, and fiduciaries with respect to such plans and IRAs.

The final rule treats persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA as fiduciaries in a wider array of advice relationships.

It also will assist the Department in preparing any analyses that it may need to perform pursuant to Executive Orderthe Paperwork Reduction Act, and the Regulatory Flexibility Act.

The ERISA and Code provisions at issue generally prohibit fiduciaries with respect to employee benefit plans and individual retirement accounts IRAs from engaging in self-dealing in connection with transactions involving these plans and IRAs. For example, a minimal fee in a service contract which is charged to allow recoupment of reasonable start-up costs is not a penalty.

DOLs (b) Final Fee Disclosure Rule –

A long-term lease which may be terminated prior to its expiration without penalty to the plan on reasonably short notice under the circumstances is not generally an unreasonable arrangement merely because of its long term. Big shifts may be coming in how retirement plans are managed after the Labor Department announced the final version of its rules under Section b 2 of ERISA, which require broker dealers disclose their services and fees to plan sponsors for individual plans.

Fred Reish shares some thoughts on the process. A Upon the written request of the responsible plan fiduciary or covered plan administrator, the covered service provider must furnish any other information relating to the compensation received in connection with the contract or arrangement that is required for the covered plan to comply with the reporting and disclosure requirements of Title I of the Act and the regulations, forms and schedules issued thereunder.


29 CFR 2550.408b-2 – General statutory exemption for services or office space.

These exemptions generally permit fiduciaries to receive compensation or other benefits as a result of the use of their fiduciary authority, control or responsibility in connection with investment transactions involving plans or IRAs. A practical approach to benchmarking fees in a manner that complies with b 2 is outlined here. This amendment regulatons partial revocation is applicable to transactions occurring on or after April 10, Unfortunately, these disclosures appear to promise only a mixed bag, leaving some k finla sponsors befuddled.

The requirements of this paragraph c 1 are independent of fiduciary obligations under section of the Act.

H Guide to initial disclosures. Written comments must be received by the Department on or before July 6, The DOL has issued numerous fee disclosure regulations in an effort to make fees more transparent for plan sponsors and hold them accountable as fiduciaries, a role eegulations requires them to act prudently and for the benefit of plan participants and their beneficiaries.

The exemption proposed in this document, if granted, would allow certain insurance intermediaries, and the insurance agents and insurance companies they contract with, to receive compensation in connection with fixed annuity transactions that may otherwise give rise to prohibited transactions as a result of the provision of investment advice to plan participants and beneficiaries, IRA owners and certain plan fiduciaries including small plan sponsors.

This Bulletin supplements the participant-level disclosure regulation by providing guidance on some of the most frequently asked questions concerning the participant-level disclosure regulation and how it may be implemented.

During the period of A’s second contract, A provides additional investment advice regulatilns for which no additional charge is made. To date, service providers have carried most of the load, studying the new fee-disclosure rules and preparing their own disclosure forms, but that is beginning to change.

A description of any compensation regullations will be paid among the covered service provider, an affiliate, or a subcontractor, in connection with the services described pursuant to paragraph c 1 iv A of this section if it is set on a transaction basis e. This final rule replaces the interim rule with minor changes and revisions. This article reviews the impact of these regulations on b Advisors. The Department of Labor has issued the long-anticipated final service funal fee disclosure regulation.


In the wake of new fee disclosure rules, plan sponsors have increased their focus on how recordkeeping fees are allocated across participant populations. We will not institute a second comment period on this rule. This is a FAQ to assist plan fiduciaries in carrying out their fee disclosure duties. Get tips to help show your clients the value of the important services you provide.

This amendment to the b 2 regulation is effective September 14,without further action or notice, unless significant adverse comment is received by August 15, Summary This document contains a final regulation under the Employee Retirement Income Security Act of ERISA or the Act requiring that certain service providers to pension plans disclose information about the service providers’ compensation and potential conflicts of interest. PTE allows fiduciaries to receive compensation in connection with certain securities transactions entered into by plans and IRAs.

This has consequences for both the responsible plan fiduciary and the CSP. Assessing the reasonableness of fees as a result of b 2 regulations has put an increased burden on the already busy shoulders of retirement plan sponsors.

This document corrects two errors in the preamble of a document that appeared in the Federal Register on November 29, These amendments are applicable to transactions occurring on or after April 10, If, however, the Department receives significant adverse comment, the Department will withdraw the direct final rule and it will not take effect.

PTEPart V, permits the extension of credit to a plan or IRA by a broker-dealer in connection with the purchase or sale of securities; however, it originally did not permit the receipt of compensation for an extension of credit by broker-dealers that are fiduciaries with respect to the assets involved in the transaction.

This amendment permits investment advice fiduciaries to receive compensation when they extend credit to plans and IRAs to avoid a failed securities transaction.

Changes to the b 2 ERISA rules regarding service provider compensation reporting and disclosure have sparked a growing interest in the amount and reasonableness of compensation plans are paying to service providers, including financial professionals.