The final regulations represent the last step in a process that the DOL began in Abstract: (b)2 Provider Disclosures have created confusion for employers. This document contains a final regulation under the Employee Retirement Income Security Act of (ERISA or the Act) requiring that certain. This bulletin discusses the impact of the U.S. Department of Labor’s (DOL) final (b)(2) disclosure regulation on discretionary investment managers – that is.

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If the furnishing of office space or a service involves an act described in section b of the Act relating to acts involving conflicts of interest by fiduciariessuch an act constitutes a separate transaction which is not exempt under section b 2 of the Act. This document also delays the applicability of certain amendments to Prohibited Transaction Exemption for the same period. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken reguations an independent review of its accuracy, completeness, efficacy, and timeliness.

This document also proposes to delay the applicability of certain amendments to Prohibited Transaction Exemption for the same period. This white paper addresses the fiduciary standards applicable to such allocation decisions.

Some plans offer participants access to brokerage windows in addition to, or in place of, specific investment options selected by the plans’ fiduciaries. Given the current economic malaise and the likelihood that k litigation will increase in volume and sophistication, sponsors and fiduciaries should realize that it is in their best of interest to not only seriously address several challenging questions, but also to document the steps they are taking to resolve them.

In finalizing the regulation, the DOL extended the compliance deadline from April 1,to July 1, The description may include a reasonable and good faith estimate if the covered service provider cannot otherwise readily describe compensation or cost and the covered service provider explains the methodology and assumptions used to prepare such estimate. Have you looked at them? The prohibitions of section b supplement the other prohibitions of section a of the Act by imposing on parties in interest who are fiduciaries a duty of undivided loyalty to the plans for which they act.

The material referenced was created, published, maintained, or otherwise posted by institutions or organizations independent of khelpcenter. The covered service provider must disclose the following information to a responsible plan fiduciary, in writing. The final regulations represent the last step in a process that the DOL began in to expand disclosure of compensation paid to service providers to ERISA-subject plans.

A, who is not a party in interest with respect to P, persuades E that the plan needs the services of a professional investment adviser and that A should be hired to provide the investment advice.


The major changes are described here, with citations to the relevant provisions of the final rule.

In the wake of new fee disclosure rules, plan sponsors have increased their focus on how recordkeeping fees are allocated across participant populations. With no specific DOL prohibition, they conclude that a CSP is free to provide an initial assessment of their fees and services to a Responsible Plan Fiduciary as long as the substance and the spirit of the b 2 regulations and other ERISA fiduciary duties are followed.

Nor may a fiduciary use such authority, control, or responsibility to cause a plan to enter into a transaction involving plan assets whereby such fiduciary or a person in which such fiduciary has an interest which may affect the exercise of such fiduciary’s best judgment as a fiduciary will receive consideration from a third party in connection with such transaction.

Billions of dollars in what I call spread based fees remain undisclosed under the new US Department of Labor fee disclosure rules. Written comments on the proposed regulation should be received by the Department of Labor no later than July 9, This paragraph c 1 iv C 3 shall not apply to compensation received by an employee from his or her employer on account of work performed by the employee.

In that case, we will address all public comments in a subsequent final rule based on this proposed rule.

29 CFR 2550.408b-2 – General statutory exemption for services or office space.

Paragraph c 1 of this section shall apply to contracts or arrangements between covered plans and covered service providers as of the effective datewithout regard to whether the contract or arrangement was entered into prior to such date; for contracts or arrangements entered into prior to the effective datethe information required to be disclosed pursuant to paragraph c rdgulations iv of this section must be furnished no later regulationw the effective date.

G Manner of receipt. E causes P to retain I to provide certain kinds of investment advisory services of a type which causes I to be a fiduciary of P under section 3 21 A ii of the Act. Investment Advisers Act of The amendments increase the safeguards of the exemption.

Summary This document corrects two errors in the preamble of a document that appeared in the Federal Register on November 29, The former transition period was from June 9,to January regulatkons, If significant adverse comment is received, the Department will publish a timely withdrawal of this amendment in the Federal Register. Section b 2 of the Act does not contain an exemption from other provisions of the Act, such as sectionor other provisions of law which may impose requirements or restrictions reegulations to the transactions which are exempt under section b 2.

A long-term lease which may be terminated prior to its expiration without penalty to the plan regulahions reasonably short notice under the circumstances is not generally an unreasonable arrangement merely because of its long term.


We will not institute a second comment period on this rule.

DOLs (b) Final Fee Disclosure Rule –

Attendees raised several questions that the author comments more broadly here. The Department is publishing this amendment as a direct final rule without prior proposal because the Department views this as highly technical and anticipates no significant adverse comment.

The amendment is applicable to disclosures made on or after June 17, The new service provider disclosure regulation b-2 provides that a contract will not be considered “reasonable” under ERISA unless certain information is disclosed by the service provider to the plan fiduciary regarding their services and the compensation they received or are expected to receive.

The new transition period ends on July 1,rather than on January 1, These exemptions generally permit fiduciaries to receive compensation or other benefits as a result of the use of their fiduciary authority, control or responsibility in connection with investment transactions involving plans or IRAs. Public comments on the proposals may now be submitted to the Department on or before July 21, Department of Labor’s final b 2 disclosure regulation on discretionary investment managers — that is, investment advisers with the authority to manage the assets of ERISA-governed retirement plans.

Such a provision does not reasonably compensate for loss if it provides for payment in excess of actual loss or if it fails to require mitigation of damages. If adopted, the amendments would affect employee benefit plans, primarily small defined contribution plans, participants and beneficiaries, service providers, and individuals appointed to serve as trustees under chapter 7 of the U. It looks like the regs have the effect of shifting the application of the rules related to the “amount involved” in the transaction a bit.

The proposed amendments would require the fiduciaries to satisfy uniform Impartial Conduct Standards in order rinal obtain the relief available under each exemption. If, however, the Department receives significant adverse comment, the Department will withdraw the direct final rule and it will not take effect.

Written comments concerning the proposed class exemption must be received by the Department on or before July 6, The Fun Begins Now!

The Request for Information contained in this Notice will assist the Department in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows by plans are necessary to protect participants’ retirement savings.