Steps for plan sponsors in anticipation of 408(b)(2)

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Aiming to curb confusion, misunderstandings and lack of disclosure related to the fees associated with retirement plans, the Department of Labor has enacted a new regulation, Section 408(b)(2), effective Jan. 1, 2012.

To maintain compliance with this new regulation, there are several steps for sponsors to take:

  • Document your review and decision-making process.
  • Assess service providers’ competence by reviewing their references and credentials.
  • Compare providers’ services and compensation with offerings made to plans comparable to yours in terms of size and other characteristics.
  • Analyze vendors’ conflicts of interest.
  • Document the basis for the selection of the service providers.
  • Monitor the service providers.

Information provided by Oswald Financial.