Schedule C

[austin3515]

Plan A, an audited plan, invests all of it's money in the Fidelity ABC Fund. The Plan is a pooled account so there is no recordkeeper to provide the disclosures.

Fidelity ABC Fund in turn pays a management fee to FMR (Fidelity's investment management arm) of $15,000. Am I required to report FMR as a service provider on Schedule C and report the $15,000 of management expenses? Fidelity is not going to be sending a Schedule C report to the Plan - the investment is taking place through either a brokerage account or a custodial/trust account. As such I cannot imagine this would qualify as eligible indirect compensation.

OR would existing laws that talk about sending prospectuses automatically satisfy the Eligible Indirect Compensation disclosures?

[Peter Gulia]

Sometimes, the person that furnished the disclosures that allow an indirect compensation to be treated as eligible indirect compensation is not necessarily a recordkeeper or similar intermediary but might the fund's distributor or transfer agent, or even the fund itself.

[austin3515]

I get that, but let's say no ponies up for the job, but the plan sponsor goes out and gets all the prospectuses? Can the plan sponsor list itself as providing the disclosures?

[Peter Gulia]

If the plan's fiduciary retrieves the prospectus from the investment fund's website, it might be truthful to say that the fund itself furnished the disclosure information. Following this, the Schedule C could report the name and address of the fund.

[austin3515]

That works for me... Still an idiotic rule though.