What if a Service Provider Didn't Disclose?
Under ERISA Section 408(b)(2), covered service providers are required to disclose certain information about their fees to plan fiduciaries.
These disclosure statements were due on July 1, 2012. Service providers that do not submit disclosure statements risk being reported to the U.S. Department of Labor ("DOL"), and may lose their class exemption, and therefore their contract with the plan.
If a disclosure statement was not received, the plan administrator will request the missing information in writing. The service provider must then comply within 90 days. If no response is received, the service provider must be reported to the DOL within 30 days after the 90-day window from the request.
The DOL has created a dedicated website for such notifications: http://www.dol.gov/ebsa/regs/feedisclosurefailurenotice.html. The website will provide an immediate confirmation that the information was received. Alternatively, the notice can be emailed to OEDelinquentSPNotice@dol.gov, or mailed to:
U.S. Department of Labor
Employee Benefits Security Administration Office of Enforcement
P.O. Box 75296
Washington, DC 20013.
Additionally, if a service provider does not provide the required disclosures, it may be unreasonable for a plan to continue doing business with them. In that case, the contract with that service provider could be terminated "as expeditiously as possible," consistent with the duty of prudence.
For more information on service provider fee disclosures, contact your Trust Fund counsel.
Author: Daniel S. Brome
