Jim 

 

If your company plan does not now feature absolute participant fee transparency that is fully compliant with the spirit and requirements of the new DOL regulations - and is reported in a format that is easy for participants to understand and follow - it's time to be proactive, today, to make sure you either have or find a program that exceeds the compliance requirements of the new fee transparency rules and includes the following capabilities and features at the individual plan participant level.

 

If your record keeper/provider is on top of this, your reporting should be:

• Identifying all available mutual fund 12(b)1 and sub-T/A fee agreements affecting a participant's assets
   
• Providing accurate, participant-level accruing of all 12(b)1 and sub-T/A fees on a daily basis
   
• Crediting all cash received through 12(b)1 and sub-T/A fee agreements back to participant accounts - not some general forfeiture account - upon receipt from fund companies
   
• Accruing and paying 12(b)1 and sub-T/A fees to participants using the same calculation methods applied by each mutual fund they hold
   
• Reporting mutual fund management fee schedules, for all the funds the participant held during the quarter
   
• Providing detailed reporting of the fees each participant was individually charged for the services rendered by each of the service providers to their Plan (i.e. RIA, TPA, Custodian, Recordkeeper, Trustee, etc.)
   

Many ERISA experts believe the vast majority of small plans, who feel safe with their vendors' disclosures under 408(b)(2) may be in for a rude awakening when it comes to making their own 404(a)(5) disclosures to participants.  

 

While 408(b)(2) addresses the prohibited transaction issue, which could force termination of a plan relationship, a 404(a)(5) breach is a fiduciary breach, which removes protections many plan fiduciaries unknowingly could lose.

 

If you have any questions, feel free to call me at 805.265.5416.

 

Jim