Fee Disclosure Q & As
Fee disclosure regulations bring some newly required reporting activities and return focus to some activities that were already in place but perhaps not implemented in a consistent manner. SunGard Relius, an industry leader in the retirement plan industry, has posted a 12-part Q & A series of Technical Updates on its websites that cover what's new and not so new in fee disclosure. The following provide the service provider fee disclosure questions addressed in Parts XI and XII.
This Q & A compares the service provider fee information required on Schedule C by the Department of Labor (DOL) with the disclosure requirements under the regulations. It addresses the following questions:
- How does the coverage of Schedule C and the regulations differ regarding type of plan, plan size, and monetary threshold?
- How does the "perspective" of the Schedule C reporting rules differ from that of the disclosure regulations?
- How do the Schedule C and the regulations differ regarding the scope of service providers subject to reporting / disclosure?
- Is the compensation subject to Schedule C reporting and regulatory disclosure the same?
- Do the regulations directly address the Form 5500 reporting requirements?
- Are there examples of service provider compensation that illustrate the differences between regulatory disclosures and Schedule C reporting?
- Do both the regulations and the Schedule C require reporting on "non-compliant" service providers?
- In general, what are the key differences between Schedule C reporting and the regulatory disclosures?
This Q & A addresses the termination requirements through the following questions:
- Do the provisions for termination of a service provider contract impact whether the contract is reasonable?
- Are the contract termination provisions in addition to the fee disclosure regulations?
- What is the basic limitation on contract termination?
- May a service provider contract include a provision that "reasonably' compensates the service provider for loss upon early contract termination?
- Do the regulations prohibit a long-term lease?
Please
contact us with questions about service provider fee disclosure as they relate to TPA services.