Who Does the Final ERISA 408(b)(2) Disclosure Regulations Apply To?

April 25, 2012

As we discussed earlier, the U.S. Department of Labor (“DOL”) has issued the final 408(b)(2) regulations, which place disclosure requirements on “service providers” to ERISA covered plans. Under the 408(b)(2) regulation, a covered service provider is any person who provides services to an ERISA covered plan, if the service provider expects to receive at least $1000 for the services provided. The $1000 threshold applies over the life of the services to the plan and is not calculated on an annual basis. Covered service providers that are required to make disclosures pursuant to 408(b)(2) include state and federally registered investment advisers; record-keepers or brokers who make designated investment alternatives available to an ERISA covered plan; and providers of various services such as accounting, legal, insurance, etc. depending on the particular services provided to the ERISA covered plan.

The 408(b)(2) disclosure obligations are imposed on covered service providers in order to ensure that the “responsible plan fiduciaries” are given the information needed to make informed decisions when choosing which service providers to hire for their ERISA covered plans. A “responsible plan fiduciary” is defined as a fiduciary with the authority to enter into a service agreement for an ERISA covered plan.

If your investment adviser would like more information on the 408(b)(2) regulations, join RIA Compliance Consultants on Thursday May 10, 2012, at 12:00 p.m. CDT, for our upcoming webinar, New 408(b)(2) Disclosure Requirements Affect Investment Advisers to ERISA Plan Accounts. During this webinar, our affiliated law firm, Bryan Hill Attorney at Law, will provide information about the 408(b)(2) regulation, including a review of the definition of covered service provider and will discuss which activities provided by investment advisers are considered to be activities of a “covered service provider” to an ERISA covered plan. To register for this webinar, click here.

Posted by Bryan Hill
Labels: 408(b)(2), ERISA, Webinar