3978. How is a service provider’s expected compensation to be disclosed?Connie L Jumprcline202014-06-23T23:39:00Z2014-06-23T23:39:00Z12031163The National Underwriter Company921364143978. How is a service provider’s expected compensation to be disclosed? The regulations give service providers latitude in how they disclose the compensation they receive. A fiduciary who needs more information to ascertain the reasonableness of an agreement would request such information in accordance with the notification process in the regulations. The fee disclosures may be an estimate of the compensation and can be expressed as a monetary amount, formula, percentage of the covered plan’s assets, a per capita charge for each participant or beneficiary, or, if the compensation cannot reasonably be expressed in these terms, by any other reasonable method. This disclosure, in whatever form it is provided, must contain sufficient information to permit evaluation of the reasonableness of the compensation by the responsible plan fiduciary.Labor Reg. §2550.408b-2(c)(1)(iv)(E). Practice Point: Since the effective date of the final 408(b)(2) regulations, the Department of Labor has been reviewing service provider’s disclosures and has proposed an amendment to the regulations which would now require that plan sponsors issue a “guide” to their disclosure packages. The guide is designed to allow plan fiduciaries to quickly and easily find their specific disclosures in what has proven to be voluminous pages of paperwork plan service providers have used as their disclosure packages.PAGE