In February of 2012, the DOL published long-awaited final regs under Section 408(b)(2) of ERISA which took effect July 1, 2012. These require the disclosure of fees that service providers charge to pension and 401(k) plans. In light of this ruling, employers shuold:
- Review their pension and 401(k) plan documents, SPDs and TPA agreements to determine if the company is identified as the plan administrator or named fiduciary.
- Obtain fiduciary liability insurance coverage if the company, committee or individuals are identified as a fiduciary or plan administrator.
- Contact the existing TPA to determine its position on compliance with the new regs. If the existing TPA is willing to provide support for compliance with the new regs, enter into a service agreement with the TPA which spells out what responsibilities of the TPA are and the fees for same. Consider having these fees paid from the company funds rather than the plan assets, at least for the initial compliance requirements.
- Put in place written procedures and policies which spell out how and by whom the fiduciary obligations of the new regs will be fulfilled.
- Don’t permit the company or yourself to be a sitting duck for inventive plaintiffs class action lawyers which are sure to have an interest in the new fee regs.
Posted by Carl H. Hellerstedt, Jr.
Mr. Hellerstedt is Counsel with Spilman Thomas & Battle, PLLC. His primary areas of practice are labor and employment and ERISA law.