408(b)(2) Disclosure Requirement - Pooled Fund

[metsfan026]

Good morning everyone!  Is the 408(b)(2) required for a Trustee directed pooled fund?  It doesn't appear that the investment people do it, and the client is asking.  I wanted to confirm if it was required under this scenario or not.

Thanks in advance!

[Bri]

Will the asset providers receive more than $1,000 in compensation from the plan cumulatively during the arrangement?

[Bird]

I believe the answer is yes. 408(b)(2) is about income received as opposed to fees charged (to participants, a la 404(c)), and it applies to all plans.

[Peter Gulia]

metsfan026, if your inquirer is a plan’s fiduciary and has responsibility for selecting, monitoring, or deselecting a service provider regarding the plan or its trust, she might insist on disclosures even if nothing in the 408b-2 rule requires a disclosure.

[Paul I]

Metsfan, out of curiousity, is the Trustee an individual or group of individuals, or it the Trustee a service provider apart from the client like a bank?  Similarly, are the "investment people" a financial advisory group, a custodian, a mutual fund group or other similar third party provider? 

I ask because 408(b)(2) is about documenting and managing fees, and has become deeply ingrained in the normal course of a service provider doing business with a plan.  I have not seen any recent instances of a service provider not automatically making the disclosure.  It sounds here as if a disclosure is required at some level and it is not clear that the service provider(s) or possibly the plan fiduciaries are on top of things.

The service agreements underlying the disclosure are made between the service provider and a Responsible Plan Fiduciary.  The RPF is a named individual who represents the plan in the agreement, so hopefully that individual knows they are the RPF and understands the duties and responsibilities associated with that role.