Tacit in the language of the DOL’s proposed prudence safe harbor requirement that a fiduciary “read and critically review” the investment documents supporting a broad range of often commonplace DC investments is, I would think, the implication that the documents provided to the fiduciary should, indeed, be “readable.”
There are really two different types of
The DOL’s proposed prudence safe harbor regulations have pretty much made it “table stakes” for some responsible person somewhere to read and understand any annuity contracts on behalf of the plan which are provided as part of any DC lifetime income program. This means, of course, you have to first know where those annuities are
A common misunderstanding between 408(b)(2) and 404(a)(5) is the nature of the requirements: 408(b)(2) requires the service provider’s contract with the plan’s fiduciary contain certain, specific terms. It does NOT require that those fees be disclosed to participants, nor does it require annual disclosure. It is simply a business matter between the fiduciary and the service provider. The only time a follow-up “disclosure” is ever required is if there is a material change in the contract’s terms (including the service fee), and then that disclosure is only required to be made to the plan fiduciary.
Continue Reading The Use, and Impact, of 408(b)(2) and 404(a)-5 Are Often Confused
A number of friends, and other commentators, had suggested to me that I was perhaps “overstating” the position I had discussed on my last blog regarding the delivery of 404a-5 notices to non-electing participants in an elective deferral plan. It was a very kind way of saying that I was wrong. After looking at the