ERISA 408(b)(2) Disclosures

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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.