New Report on Employee Retirement Income Security Act: Overview and Action Items

The Pension Resource Institute has provided FSI members their report on Employee Retirement Income Security Act (ERISA) Compliance: Overview and Action Items. There are two new rules which will become effective this year, ERISA section 408(b)(2) and ERISA section 404(a)(5), and both will present significant challenges to broker-dealers and investment advisers.

The amendments to ERISA Section 408(b)(2) will become effective in July 2012 and require all "covered" service providers to provide detailed disclosures to their ERISA-covered clients detailing the services to be provided, any and all direct and indirect compensation received in connection therewith, and an acknowledgement concerning which services are provided as an ERISA fiduciary or an investment adviser.

Also, by August 30, 2012, ERISA section 404(a)(5) requires sponsors of participant-directed retirement plans to provide initial disclosures of performance and fee-related information for the plan's designated investments, as well as any administrative and/or individual expenses that may be charged to or deducted from participants' accounts.

Click here to read the paper.