Covered Service Provider Disclosure

[holdco]

hello everyone!

Hopefully an easy question. If a law firm provides services to a retirement plan (specifically, to the plan sponsor/administrator of that plan, a company client), are we required to send a disclosure under the final 408 regulations? Are we a covered service provider? I can't confirm whether or not that's the case anywhere. Any suggestions or authority would be appreciated. Thank you!

[Bill Presson]

hello everyone!

Hopefully an easy question. If a law firm provides services to a retirement plan (specifically, to the plan sponsor/administrator of that plan, a company client), are we required to send a disclosure under the final 408 regulations? Are we a covered service provider? I can't confirm whether or not that's the case anywhere. Any suggestions or authority would be appreciated. Thank you!

Legal services are covered, but it only counts if you are going to receive any indirect compensation from the plan.

All the attorney's that I know get paid by the employer and not by the plan, so I don't think it will apply.

[holdco]

hello everyone!

Hopefully an easy question. If a law firm provides services to a retirement plan (specifically, to the plan sponsor/administrator of that plan, a company client), are we required to send a disclosure under the final 408 regulations? Are we a covered service provider? I can't confirm whether or not that's the case anywhere. Any suggestions or authority would be appreciated. Thank you!

Legal services are covered, but it only counts if you are going to receive any indirect compensation from the plan.

All the attorney's that I know get paid by the employer and not by the plan, so I don't think it will apply.

Thank you for the reply! So if Company A sponsors Company A DC Plan, and we've rendered some opinions regarding that plan, or re-drafted some provisions, we should not have to provide any disclosure, if we got paid by Company A and not the Company A DC Plan?

[holdco]

And as a quick follow-up, is it possible that we are providing fiduciary services to the plan somehow by rendering the above legal work? Thank you again!

[jpod]

To be a CSP the law firm needs to have a contract or arrangement "with the plan." Does it?

[holdco]

To be a CSP the law firm needs to have a contract or arrangement "with the plan." Does it?

I'm not certain. The only contract that we have is a retainer agreement, but the contract is with the plan sponsor/administrator.

[holdco]

To be a CSP the law firm needs to have a contract or arrangement "with the plan." Does it?

I'm not certain. The only contract that we have is a retainer agreement, but the contract is with the plan sponsor/administrator.

Also, let's say we do have a contract or arrangement with the plan. Wouldn't legal services constitute indirect compensation (from the plan sponsor) under the final regulation? So the law firm would then have to disclose?

[Bill Presson]

To be a CSP the law firm needs to have a contract or arrangement "with the plan." Does it?

I'm not certain. The only contract that we have is a retainer agreement, but the contract is with the plan sponsor/administrator.

Also, let's say we do have a contract or arrangement with the plan. Wouldn't legal services constitute indirect compensation (from the plan sponsor) under the final regulation? So the law firm would then have to disclose?

Plan sponsor payments do not count as indirect compensation.

From the rules: It also applies to providers of other specified services who receive either "indirect compensation'' (generally from sources other than the plan or plan sponsor) or certain types of payments from affiliates and subcontractors.

Also, I've been told from other attys that they would never sign an agreement directly with the plan because they might then have to sue the sponsor.

[jpod]

What I was hinting at by my question is that you don't need to undertake any inquiries concerning the attorney's fees unless the attorney had a "contract or arrangement with the plan," and unless the attorney was retained as the plan's counsel - as opposed to the plan sponsor's counsel, as is typical - there would be no such contract or arrangement, IMHO.

[holdco]

To be a CSP the law firm needs to have a contract or arrangement "with the plan." Does it?

I'm not certain. The only contract that we have is a retainer agreement, but the contract is with the plan sponsor/administrator.

Also, let's say we do have a contract or arrangement with the plan. Wouldn't legal services constitute indirect compensation (from the plan sponsor) under the final regulation? So the law firm would then have to disclose?

Plan sponsor payments do not count as indirect compensation.

From the rules: It also applies to providers of other specified services who receive either "indirect compensation'' (generally from sources other than the plan or plan sponsor) or certain types of payments from affiliates and subcontractors.

Also, I've been told from other attys that they would never sign an agreement directly with the plan because they might then have to sue the sponsor.

Thank you, that's very helpful. So summing up, an employee benefits practice at a law firm, that provides advice (e.g., in the form of memoranda, e-mails, etc.) to a plan sponsor, and once a year updates/drafts plan documents would not be a covered service provider and/or would not be receiving compensation of the kind contemplated by the final regulation and necessitating disclosure to the plan?

[jpod]

We're trying to direct you to the points to consider in analyzing the issue and resolving it for yourself. I can't speak for others but you're not paying me enough to give you an opinion on the issue.

[holdco]

We're trying to direct you to the points to consider in analyzing the issue and resolving it for yourself. I can't speak for others but you're not paying me enough to give you an opinion on the issue.

Hah, I got you. Not a problem. I figure that's the answer, and that's what I've been finding. Just looking for confirmation. Thanks.