Last July, the Department of Labor issued the 408(b)(2) interim final regulation on fee disclosure for pension plans. The rule is designed to help plan sponsors and fiduciaries determine whether the fees and compensation they pay the plan’s service providers are reasonable.
It requires that certain service providers disclose information to help plan fiduciaries in assessing the reasonableness of contracts or arrangements, including the reasonableness of the service providers’ compensation and potential conflicts of interest. Some expect the regulation, effective July 16, 2011, will level the playing field for third-party administrators, many of whom have already been disclosing their fees for years.
