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DOL Proposes Amendment to Section 408(b)(2) of ERISA for Plan Fiduciaries Guide Requirement

The Department of Labor (“DOL”) released a fact sheet in March 2014 detailing a proposed amendment to Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”) that would, if passed and enacted, require a guide for plan fiduciaries to follow when disclosures are provided, particularly “if the disclosures are contained in multiple or lengthy documents.” In current regulation, pension plan service providers must provide disclosure documents to plan fiduciaries “before entering into, extending or renewing contracts or arrangements for services,” but these documents can be “complex” and difficult to navigate, making compensation information related to service providers harder to find.

Key to this new amendment, which was published on the Federal Register on March 12, 2014 and open for public comment, is the inclusion of a “specific locator” which includes “the identity of the document and where the information is located within the document,” with references to page and section numbers. More pointedly, the plan service providers must identify where certain important information of a plan can be found in disclosure documents, including:

  • the description of services to be provided;
  • the statement of services to be provided as a fiduciary and/or as a registered investment adviser (“RIA”);
  • the description of:
    • all direct and indirect compensation
    • any compensation that will be paid among related parties
    • compensation for termination of the contract or arrangement, and
    • compensation for recordkeeping services; and
  • the required investment disclosures for fiduciary services and recordkeeping and brokerage services, including annual operating expenses and ongoing expenses, or if applicable, total annual operating expenses.

For further information on this and other related subjects, please contact us at or (619) 298-2880.