Department of Labor Finalizes Form 5500 Fee Disclosure Rules and Proposes Guidance for Contracts Between Plans and Service Providers Under ERISA 408(b)(2)

On November 16, 2007, the Department of Labor (DOL) issued the final rule concerning revisions to the Form 5500 Schedule C fee disclosure for employee benefit plans. This final rule essentially adopted the proposed rule and is effective for plan years beginning on or after January 1, 2009. Following this final rule, the DOL released a proposed regulation along with a proposed prohibited transaction class exemption on December 13, 2007 that provides guidance for arrangements between employee benefit plans and service providers. The DOL anticipates that these proposals will aid plan fiduciaries in accessing the reasonableness of compensation paid to service providers and any potential conflict of interests that may arise. These releases are the first two of three plan fee disclosure projects that the DOL had planned to issue. The final project concerns the disclosures by plan sponsors to participants and is expected in early 2008.

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