3962. What are the fee disclosure requirements imposed by the DOL?Connie L Jumprcline202014-06-23T18:52:00Z2014-06-23T18:52:00Z23201829The National Underwriter Company1542145143962. What are the fee disclosure requirements imposed by the Department of Labor (“DOL”)?In recent years the DOL has taken a three pronged approach in educating plan sponsors and participants about fees related to qualified retirement plans. The first prong of the DOL’s approach to fee education requires all large plan filers to complete a Schedule C with their annual 5500 series report. Schedule C reports compensation exceeding $5,000 that has been paid to plan service providers in the reporting year. The compensation reported must be categorized as either direct or indirect compensation. Payments received directly from the covered plan are direct compensation. Compensation received from sources other than directly from the plan or plan sponsor is indirect compensation.The second prong of the DOL's disclosure initiatives are promulgated under ERISA Section 408(b)(2). The regulation requires covered service providers to disclose compensation in excess of $1,000 to responsible plan fiduciaries. The initial disclosures were due by July 1, 2012. Providing these disclosures is the responsibility of the covered service provider; however, if the covered service provider does not provide the disclosures, the responsible plan fiduciary must request them or risk having the contract between the service provider and plan deemed a "prohibited transaction." The third and final prong of the DOL's fee disclosure initiative requires disclosure to plan participants in individually directed account plans. For calendar year plans, the deadline for initial participant fee disclosures was August 30, 2012. Following the initial disclosures, plans are required to make ongoing disclosures to participants and beneficiaries in participant-directed individual account plans on an annual basis, with quarterly disclosures identifying fees and expenses deducted from the participant’s account in the prior quarter. A checklist for service providers and responsible fiduciaries to use as guidance for compliance with these new requirements is available online at www.TaxFactsUpdates.com.PAGE