Fast facts about Section 408(b)(2)

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Section 408(b)(2), a 2012 regulation for retirement plan fiduciaries enacted by the Department of Labor, was effective Jan. 1, 2012. Here are some fast facts about 408(b)(2):

  • It affects all retirement plan fiduciaries, including plan sponsors and investment committee members.
  • It requires plan sponsors to understand all fees and expenses associated with their retirement plan.
  • It requires plan sponsors to have a contract or agreement, in writing, with their service providers disclosing all fees associated with your retirement plan, and it must be reasonable.
  • It requires plan sponsors to make sure services being performed are necessary to establish and operate a qualified plan.
  • It requires plan sponsors to make sure no more than reasonable compensation is paid for services performed, and their fees are competitive within the marketplace.
  • It requires service providers to provide full fee transparency not only to plan sponsors, but also to each plan participant.

Information provided by Oswald Financial.

 

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