The Department of Labor (DOL) has issued an interim final regulation requiring pension plan service providers to disclose to plan fiduciaries detailed information about the fees they charge. The new rule is scheduled to become effective on July 16, 2011 and applies to plan service providers that expect to receive $1,000 or more in compensation and that:
- Provide certain fiduciary or registered investment advisory services,
- Offer plan investment options in connection with brokerage or recordkeeping services, or
- Otherwise receive indirect compensation for providing certain services to the plan.
The new rule is intended to help fiduciaries assess the reasonableness of fees charged by their service providers and to identify any potential conflicts of interest that may impact a service provider's performance. Public comments are due on the new rule by August 30.
Phyllis Borzi, the head of the DOL's Employee Benefits Security Administration (EBSA) said the DOL expects to release additional regulations later this year requiring plan fiduciaries to make certain fee disclosures to plan participants.
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