On July 16, 2010, the DOL released an “interim final regulation” under ERISA Section 408(b)(2) related to the disclosure of fees by service providers. Covered service providers will need to comply with the regulation by July 16, 2011, for all contracts or arrangements, regardless of whether they were entered into before the effective date. The rule states that it is a prohibited transaction for a plan to enter into an arrangement with a service provider unless the “arrangement” is reasonable and the compensation being received by the service provider is reasonable. The new regulation adds disclosure requirements for determining whether a service provider arrangement is reasonable. The new rule finalizes the regulation originally proposed in 2007, and differs from the proposed rule in a number of respects.
Read Fred Reich and Bruce Ashton’s article for more details.