9 Key Items for Plan Sponsors to Consider When Reviewing Service Provider Disclosures Provided Under ERISA 408(b)(2)

On or before July 1, 2012, plan sponsors should have received disclosures from all covered service providers to the plan of the costs of services, direct and indirect compensation, and fiduciary status. Responsible plan fiduciaries are obligated to ensure provided disclosures are complete and in compliance with Regulation 2550.408.b-2(c). In making a determination of completeness, be sure to consider these nine key items:

1. Service Agreements: Do written agreements currently exist?

2. Disclosures: Were they provided before the agreement was signed?

3. Service Descriptions: Are all services fully described?

4. Compensation: Are all forms of direct and indirect compensation fully disclosed?

5. Fee Reviews: Has the plan conducted a formal review to determine if service providers’ fees are reasonable and necessary?

6. Fiduciary Status: Does the provider serve the plan in an ERISA fiduciary capacity?

7. Conflicts of Interest: Has the provider disclosed any existing or potential conflicts of interest and/or fully explained how these conflicts will be managed?

8. Changes in investments:Does the recordkeeper notify the plan of these changes on at least an annual basis?

9. Corrections: Are providers aware of ERISA provisions covering punctual notification and correction of errors?

Atessa’s Accredited Investment Fiduciary Analysts™ (AIFA®) are certified by the Centre for Fiduciary Excellence (CEFEX) to help plan sponsors assess their fiduciary practices against a Global Standard of Fiduciary Excellence. These 9 items are part of the comprehensive checklists that comprise our detailed assessment methodology for plan sponsors.

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