Letter to the US Department of Labor commenting on the proposed amendment relating to reasonable contract or arrangement under Section 408(b)(2) of ERISA Fee Disclosure

SUMMARY

The Committee on Employee Benefits and Executive Compensation, in a letter to the U.S. Department of Labor, commented on a proposed amendment to Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (ERISA). Section 408(b)(2) requires that certain service providers to employee benefit plans disclose information about the service providers’ services, status under ERISA with respect to the plans, and compensation (both direct and indirect) received in connection with those services. The proposed amendment would require covered service providers to furnish a summary guide to these disclosures in certain circumstances to assist plan fiduciaries in reviewing the disclosures required by Section 408(b)(2). Though the Committee generally agrees with the Department’s efforts to promote clarity in fee disclosure, it recommends specific modifications to the proposed amendment that preserve flexibility in covered service provider disclosure and promote the utility of required fee disclosure for the entire pension plan industry, while at the same time managing the cost burden for covered service providers.