Is July 1, 2012
The DOL deadline is quickly approaching for the service provider disclosures. By July 1, 2012, plan administrators who sponsor a Defined Benefit Plan and/or a Defined Contribution Plan (Such as 401(k), Profit Sharing, ESOP) subject to ERISA are required to have agreements in place with covered service providers which detail the services provided along with compensation paid to the providers. The new disclosure rule is required for covered service providers, defined in the regulation, paid $1,000 or more. A few examples of a covered service provider are ERISA fiduciary service providers, investment advisors under federal or state law, recordkeepers or brokers who make designated investment alternatives available (platform provider). In addition, certain providers receiving indirect compensation are subject to the regulation.
Existing agreements should be reviewed to ensure they meet the requirements of the new disclosure rules by July 1, 2012. In addition, new contracts entered into on or after July 1, 2012, need to follow the new guidelines. In the event a Plan Sponsor doesn’t compile with the deadline of July 1, 2012, a prohibited transaction results.
The prohibited transaction is reported on the Form 5500 for the 2012 Plan Year and is subject to excise taxes paid by the Plan Sponsor.
Please contact Michelle Buckley at (216) 241-3272 or firstname.lastname@example.org for more information.