Your due date for providing fee disclosures to plan participants was August 30, 2012. However, if you didn’t receive fee information from one or more of your covered service providers, you are still liable to the Department of Labor as one of the parties in a prohibited transaction.
You can protect yourself by alerting the DOL to your knowledge of noncompliance based on not receiving all of the documentation that you needed. Here’s what you need to do:
- Request the missing information from the service provider.
- If that fails, notify the Employee Benefits Security Association within 30 days. You can file electronically and receive an immediate confirmation of receiving the Fee Disclosure Failure Notice.
- If you don’t file electronically, you can mail your Fee Disclosure Failure Notice. A sample letter and the address for mailing the notice are on the DOL’s Fee Disclosure Failure Notice page.
- Whether you file electronically or by mail, the documentation will provide guidance regarding the conditions you must meet to qualify for relief.
You may be tempted to say, “Now, WHY do we have to do this?!” Remember that the purpose of disclosure is to prove to yourself as fiduciary and to your plan participants that the fees you pay to manage the retirement plan are reasonable. You are preserving the employee’s wealth instead of spending inordinate amounts of savings on fees. And, conflicts of interest are revealed before they impact a provider’s performance on your behalf.