5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
The Department of Labor (DOL) will hold what is shaping up to be a contentious public hearing on March 20 and 21, 2008 on proposed 401(k) plan fee disclosure regulations under ERISA §408(b)(2) (see CCH Pension Plan Guide ¶20,537F). The hearing will be held against a backdrop of “the complexity of the issues” presented by the proposed regulations, as well as the volume of comments that the Department has received, said Louis Campagna, Chief of the Labor Department’s Division of Fiduciary Interpretations, Office of Regulations and Interpretations, who spoke during a Washington, D.C. Bar luncheon program on February 26, 2008.
The proposed regulations would require that plan fiduciaries and service providers, such as attorneys, actuaries and accountants, have a written contract that discloses the compensation received by the service providers and any potential conflicts of interest. Arrangements for services with such providers would be considered prohibited transactions unless the service provider and fiduciary reasonably comply with the written agreement requirements contained in the proposed regulations. ERISA §408(b)(2) would be amended to provide a statutory class exemption from prohibited transaction treatment to “innocent” plan fiduciaries who enter into a contract that is not “reasonable” because, unknown to the plan fiduciary, the service provider has not complied with its disclosure obligations.
According to Campagna, EBSA has received more than 100 comments on the proposed regulations. Campagna and Karen Zarenko, senior pension law specialist at EBSA’s Office of Regulations and Interpretations, discussed some of the issues raised in the comments during the luncheon. Zarenko said that many commentators wanted to know exactly who qualified as a “service provider,” and how far the regulation would extend in this respect. Commentators also questioned whether an entire new set of disclosures would be required, or whether plan fiduciaries could supplement existing disclosures with those to be required by the proposed regulations. According to Zarenko, commentators argued that, if an entirely new set of disclosures has to be made, a transition period would be necessary to comply with such a burden. She acknowledged that the regulations may cause a problem of duplicate disclosures and that it may be possible to incorporate materials by reference to already-existing disclosures. Commentators also inquired whether a cure period and correction procedures would be required.
Some attendees at the luncheon expressed frustration on behalf of their employer-clients about what they perceive as mounting and burdensome disclosure and document requirements, revealing an “enough is enough” mentality. Zarenko responded that most of the comments the Labor Department has received have applauded the disclosure requirements “in theory,” but that the DOL understands the complex issues the proposed regulations raise.