Compliance Solutions for Investment Advisers

ERISA 408(b)(2) Disclosures

Changes to section 408(b)(2) requires advisers to make additional disclosures to Plan Sponsors.  These changes take affect on July 1, 2012. The Final Rule: Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure is actually fairly clear as to what is required. The required disclosures – which must be made in a document separate from the ADV Part 2A – include:

  • Description of the service provided to the Plan;
  • A statement of the adviser’s fiduciary status;
  • Direct compensation received by the Adviser from the Plan;
  • Indirect compensation received by the Adviser from the Plan;
  • Compensation that will be paid among Adviser, an affiliate or a subcontractor;
  • Compensation that will be received by Adviser if the Plan Sponsor terminates the Service Agreement;
  • The cost to your Plan of recordkeeping services;
  • Fees and Expenses relating to your Plan’s investment options; and
  • How Adviser receives its fees for the Services.