Checklist of 408(b)(2) Plan Fiduciary Obligations After the July 1, 2012 Deadline; and What About Welfare Plans?

July 1, 2012 was the deadline for “covered service providers” to provide newly required fee disclosures under ERISA section 408(b)(2). Now that the July 1 deadline has passed, retirement plan fiduciaries have an obligation to do the following:

Identify all service providers potentially being paid directly or indirectly from the plan for their services

Confirm that every service provider on the list has provided comprehensive fee disclosures as required by the regulations or adequately explained why compliance isn’t necessary.

For any service providers that failed to either provide the required disclosures or adequately explain why compliance isn’t necessary, the plan fiduciary must:

Immediately request in writing that the service provider fully comply as soon as possible and/or explain why it believes it is not required to comply.

Notify the Department of Labor within the earlier of 90 days of the date of the written request for full compliance or, if earlier, 30 days of the date that the service provider communicates its refusal to comply. Among other required information, the notice must identify whether the covered service provider continues to provide services to the plan.

Determine whether to terminate the contract or arrangement consistent with the fiduciary’s duty to act prudently under ERISA section 404.

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