Welcome to an ERISA sunscreen moment!
Today’s Sunscreen Moment provides guidance to plan sponsors on dealing with fee disclosure noncompliance.
Beginning July 1, 2012, a plan’s covered service provider became responsible to provide certain fee disclosure information to the plan sponsor. Failure to provide these disclosures would cause the underlying fee to be considered to be a prohibited transaction.
Today’s question is: “What should plan sponsors do if they do not receive these disclosures from the provider?” For these situations, a class exemption provides relief to the plan sponsor, provided that the responsible plan fiduciary requests the required information from the covered service provider in writing.
If the covered service provider fails to comply within 90 days or refuses to comply, the responsible plan fiduciary shall notify the DOL within 30 days of the earlier of these events. This notification can be made either in writing, or electronically on the DOL’s website.
Included in the notification is the following: various information regarding the plan, the responsible fiduciary, the services received, information that the covered service provider did not disclose, and whether the covered service provider continues to provide services to the plan.
The DOL’s website to electronically file this information can be found at the following web address:
A failure to resolve this issue would cause the responsible plan fiduciary to terminate future services as expeditiously as possible.
Think of notifying the DOL regarding fee disclosure failures as taking acetaminophen for a bad headache. The sooner you make the notification, the sooner the pain of this noncompliance goes away.
This has been a sunscreen moment. Use it, and don’t get burned.