Los Angeles partner Fred Reish published his latest “Just out of Reish” column in December 2011’s PLANSPONSOR.
The feature discusses the DOL’s 408(b)(2) regulation, which requires providers to give plan fiduciaries information about their services, fees and compensation.
Fiduciaries must then evaluate the information and “make independent decisions about what information is required to make informed and reasoned decisions – and then they must obtain that information,” said Fred.
Fred discusses the factors plan fiduciaries ought take into account when evaluating service providers, such as cost, conflicts of interest, and the results being produced.
He says that the analysis of services and compensation is fairly straightforward as “both can be benchmarked” at a reasonable cost.
“The key is that the benchmarking data are based on plans of a similar size, primarily considering plan assets and number of participants,” he finished.