404(a)/408(b) required for pooled accounts?

[kwalified]

It is my understanding that these regs only apply to participant directed accounts, yes?

[Bird]

408(b)(2) is disclosure to fiduciaries, so I think it is required for all.

[kwalified]

That makes sense but as a TPA whose flat fee is paid by the employer, not the plan, and does not receive revenue sharing what is to disclose? Our annual admin fee that we disclose when we bill the plan sponsor?

[Bird]

That makes sense but as a TPA whose flat fee is paid by the employer, not the plan, and does not receive revenue sharing what is to disclose? Our annual admin fee that we disclose when we bill the plan sponsor?

Then no, you have nothing to disclose. Whether you discuss it all or not is up to you; we made it into a project where we reviewed each plan and (tried to) succinctly explain the rules and how they applied to that particular plan. I wanted my clients know a) that we were on it, and b) that someone probably owed them a disclosure (broker or investment advisor).

[GMK]

I'd suggest sending a simple note, signed by an officer of the firm, that states something like, "Our only fee is the flat annual fee that we charge to the plan/plan sponsor ($nnn in 2012). We do not receive revenue sharing or other income from other sources in connection with our services to the plan."

Then you have a document to point to if, down the road, anyone asks if you disclosed your fees, whether you really have to disclose or not.

And part of the purpose of the disclosure notices is to reveal hidden fees, which you do not have. The plan sponsor will (should) be happy to have a document to that effect. Instead of having to say, "they told me ...," the plan sponsor can now show that "they documented ..." that there are no hidden fees.

[kwalified]

thanks. I have explained the purpose of the regs in correspondence to give the client a heads up and that they should be expecting something from a csp if applicable. And I guess a statement alluding to the fact that all my plan admin fees are paid by the employer would be a simple "cya" notification.