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DOL Issues Final Regulations on ERISA 408(b)(2)
Posted February 6, 2012
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BOSTON --(BUSINESS WIRE)-- the Department of Labor (DOL) finalized its regulations under ERISA Section 408(b)(2). These rules require plan service providers to disclose their compensation and the fees and expenses related to investments to plan fiduciaries. The DOL also moved the final effective date to July 1, 2012 from April 1. In turn, fiduciaries must provide disclosures to plan participants no later than August 30, 2012 under ERISA 404(a), which was previously May 31.
"The regulations are helpful and practical," says Marcia Wagner, Managing Director and Founder of The Wagner Law Group. "Now the pension community has necessary clarity and certainty regarding the rules and adequate and necessary time for appropriate implementation." The new final regulations explain that service providers may use electronic media to make disclosures, as long as they notify fiduciaries of how to access the information.
The interim regulations pertaining to indirect compensation require that service providers give a description of all compensation they expect to receive. Providers must also state the services that result in indirect compensation and identify those who pay these costs. In addition to these disclosures, the final regulations compel service providers to describe the arrangement between the payer of indirect compensation and the service provider.
The Internal Revenue Service (IRS) released a new set of regulations on February 2, which will make it easier for retirees to choose to receive their benefits as a stream of income for as long as they live. "This is the first step in the enhancement of flexible ‘lifetime income' options that can minimize the risk of retirees outliving their retirement savings," notes Ms. Wagner. The new rules reduce the regulatory burdens associated with annuity distribution options.
The Wagner Law Group has 19 attorneys specializing in ERISA, employee benefits, and executive compensation; estate planning; and employment, labor and human resources law. Six of the firm's attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards, and three are Fellows of the American College of Employee Benefits Counsel, an invitation-only organization of nationally recognized employee benefits lawyers with 20 or more years of experience.
The Wagner Law Group has clients in over 40 states and several foreign countries. Clients, which vary in size from sole proprietors to publicly-traded multistate and multinational businesses, represent nearly every industry.
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