4142 / Under the DOL 408(b)(2) regulations, what additional disclosures are required for fiduciaries and covered service providers who provide investment and recordkeeping services?
Fiduciaries providing services to an investment or entity into which the plan invests must disclose the following types of information:1
(1) a description of all compensation that will be charged directly against the amount invested in connection with the acquisition, sale, transfer of, or withdrawal from the investment contract, product, or entity, for example, sales loads, sales charges, deferred sales charges, redemption fees, surrender charges, exchange fees, account fees, and purchase fees;
(2) a description of the annual operating expenses (for example, the expense ratio), but only if the return on the investment is not fixed; and
(3) a description of any ongoing expenses in addition to annual operating expenses (for example, wrap fees, mortality, and expense fees). In most cases these disclosures will be met through another service provider that will be providing the information to the responsible plan fiduciary. Organizations providing this type of information include fiduciaries for entities such as collective trusts, partnerships, and hedge funds.