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This document outlines the final regulation requiring service providers to disclose compensation and potential conflicts of interest when providing services to pension plans under ERISA.

How to fill out reasonable contract or arrangement

How to fill out Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure

1. Identify the services provided under the contract or arrangement.
2. Gather the fee structure related to each service.
3. Ensure all fees are clearly defined, including direct and indirect compensation.
4. Document any conflicts of interest that may arise from the arrangement.
5. Prepare a written disclosure that includes the scope of services, fees, and any potential conflicts.
6. Review the disclosure for compliance with Section 408(b)(2) requirements.
7. Distribute the completed disclosure to plan fiduciaries and participants, as necessary.
8. Maintain records of the completed disclosure for future reference and compliance checks.

Who needs Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure?

1. Employee benefit plans, particularly those governed by ERISA.
2. Fiduciaries involved in managing employee benefit plans.
3. Service providers offering investment advice or managing assets for retirement plans.
4. Plan sponsors and administrators who are responsible for fiduciary compliance.

People Also Ask about

What is the difference between 408 B 2 and 404a5?

The Service Provider Exemption applies to the following types of transactions: (1) the sale, exchange or lease of property between a plan and a party in interest; (2) lending or money or other extension of credit between a plan a party in interest; or (3) the transfer to, or use by or for the benefit of, a party in

What is the difference between 404a5 and 408 b 2?

Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (the Act) refers to the payment of reasonable compensation by a plan to a party in interest for services rendered to the plan.

What is 408 B )( 2 defined benefit plans?

ERISA Section 408(b)(2) enables advisors and other service providers to a plan to receive compensation directly or indirectly from the plan. Ordinarily, the use of plan assets (such as the assets held in the accounts of 401(k) plan participants) to pay a provider's fees would constitute a prohibited transaction.

What is 408 B 2 health plan?

ERISA Section 408(b)(2)(B) provides that any contract or arrangement related to a group health plan is not reasonable (i.e., is a prohibited transaction) unless all of the compensation (direct or indirect) that a “service provider” reasonably expects to receive (where $1,000 or more) is disclosed in writing to a

What is a 408 B retirement plan?

408(b)(2) ensures that plans are structured with reasonable fees, while 404(a)(5) enables participants to understand how these fees impact their individual accounts.

Which fees are included in the fee disclosure?

The disclosures typically cover administrative fees, investment fees and any additional charges that may apply to specific transactions or participant services. Administrative fees cover the cost of operating the plan, such as recordkeeping and compliance.

For pdfFiller’s FAQs

What is Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure?

A Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure is a requirement under the Employee Retirement Income Security Act (ERISA) that mandates certain service providers to disclose fee information to plan sponsors. It ensures transparency about the fees and services associated with retirement plans, allowing plan sponsors to evaluate the reasonableness of compensation for services rendered.

Who is required to file Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure?

Service providers to employee benefit plans, specifically those providing fiduciary or non-fiduciary services under ERISA, are required to file the Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure. This includes any entity that receives compensation for providing services to a retirement plan.

How to fill out Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure?

To fill out the Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure, service providers must provide detailed information regarding the nature of the services offered, the fees charged, and any potential conflicts of interest. The disclosure should be clear and comprehensive, presenting all necessary details that plan sponsors require for informed decision-making.

What is the purpose of Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure?

The purpose of the Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure is to promote transparency in the retirement plan industry. By mandating that service providers disclose their fees and services, it helps plan sponsors make informed choices and ensures that plan assets are managed in the best interest of participants and beneficiaries.

What information must be reported on Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure?

The information that must be reported on the Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure includes a description of services provided, the compensation arrangement, any potential conflicts of interest, and any other relevant details that impact the plan's costs and quality of service.