The DOL recently announced Reasonable Contract or Arrangement Under Section 408(b)(2)--Fee Disclosure, a DOL Proposed Regulation on fee disclosures. Reasonable Compensation Proposed Regs Floated by DOL discusses how the proposed regulations are "directed at amending ERISA Section 408(b)(2), 29 U.S.C. Section 1108(b)(2) - Exemptions from prohibited transactions - Enumeration of transactions exempted from section 1106 prohibitions to clarify the meaning of "reasonable" contract or arrangement.":
- The furnishing of goods, services, or facilities between a plan and a party in interest to the plan is generally prohibited under ERISA Section 406(a)(1)(C), 29 U.S.C. Section 1106(a)(1)(C) - Prohibited Transactions - Transactions between plan and party in interest
- Exceptions to the above-mentioned rule are provided in ERISA Section 408, including ERISA Section 408(b)(2), 29 U.S.C. Section 1108(b)(2) - Exemptions from prohibited transactions - Enumeration of transactions exempted from section 1106 prohibitions, which "exempts certain arrangements, including service contracts, between plans and service providers which would otherwise be prohibited by ERISA section 406 as long as the contract or arrangement is reasonable, the services are necessary for the establishment or operation of the plan, and no more than reasonable compensation is paid for the services."
- The proposed regulation is also proposing changes to Schedule C of Form 5500. Final Revised Form 5500 -- New Fee Reporting Rules is an article that discusses these changes in more detail. The PPA Blog post asserts that "in the land of unintended consequences, this proposed change to Schedule C may make some very interesting information public and available in a way in which it is not currently available."
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