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Communications from the Institute do not constitute, and should not be considered a substitute for, legal advice.
[20230]
August 1, 2006
TO: PENSION MEMBERS No. 47-06
RE: JOINT SUBMISSION TO DOL ON 401(k) PLAN FEES
The Investment Company Institute, American Benefits Council, American Council of Life
Insurers and Securities Industry Association yesterday made a joint submission to the Department of
Labor of a 401(k) plan fee and expense reference tool, in the form of a list of fee and expense data
elements that plan sponsors and service providers may want to discuss when entering into service
arrangements. A copy of the data elements list and cover letter is attached.
As explained in the cover letter, the list is intended as a reference tool for plan sponsors and
service providers to use in complying with their responsibilities under section 408(b)(2) of ERISA1 and
we recommend that DOL make the list available on its website. The signatory groups believe that
disclosure of the data elements on the list is one way, but not the exclusive way, to satisfy the 408(b)(2)
legal obligations of plan fiduciaries and service providers and asks that DOL confirm this.2
The data element list builds on the Model 401(k) Fee Disclosure Form that the Institute and
other groups developed (currently available on DOL’s website3) and the supplemental schedule
developed by the Institute last year to disclose payments among service providers 4 (e.g. finder’s fees and
revenue sharing.) The data element list includes disclosure of the receipt by a service provider of
payments from third parties in connection with the provision of services to the plan and similar but
more limited disclosure of the receipt of payments from affiliates.
1 DOL currently has on its regulatory agenda a project to amend the current regulation under Section 408(b)(2) of ERISA,
to clarify plan sponsor and service provider obligations regarding contracts for services to a plan. See Institute Memorandum
to Pension Members No. 32-06 [20013], dated May 5, 2006.
2 The list is not intended for disclosure to plan participants or on Form 5500. DOL has proposed changes to Schedule C of
Form 5500, which would require additional disclosure of service provider compensation. See Institute Memorandum to
Pension Members No. 45-06 [20216], dated July 25, 2006.
3 The Model 401(k) Fee Disclosure Form is available at http://www.dol.gov/ebsa/pdf/401kfefm.pdf.
4 See Institute Memorandum to Pension Members No. 25-05 [18897], dated May 27, 2005.
2
The cover letter explains that the list is intended to accommodate service bundling; for a
bundled service the provider would not show separate charges for the various elements covered by the
bundled fee but would make clear what services are included in the bundled fee.
The signatory groups intend to publicize and distribute the list within their respective
memberships and encourage its use.
If you have any questions about the submission please contact Mary Podesta (202-326-5826 or
podesta@ici.org) or the undersigned (202-326-5820 or mhadley@ici.org).
Michael L. Hadley
Assistant Counsel
Attachment (in .pdf format)
Note: Not all recipients receive the attachment. To obtain a copy of the attachment, please visit our members website
(http://members.ici.org) and search for memo 20230, or call the ICI Library at (202) 326-8304 and request the attachment
for memo 20230.