ICI, Other Associations Develop Compliance Tool for 401(k) Sponsors

Washington, DC, August 16, 2006 - In a recent submission to the Department of Labor, several organizations joined the Institute in presenting a 401(k) plan fee and expense reference tool for plan sponsors and service providers to use in complying with their ERISA responsibilities.

Background

ICI, in cooperation with the American Benefits Council, American Council of Life Insurers, and Securities Industry Association, jointly submitted the reference tool--a list of fee and expense data elements that plan sponsors and service providers for consideration in discussions before entering into service arrangements--and recommended that the Labor Department make the list available on its website. The submission notes that disclosure of the data elements on the list is one of several ways to satisfy the legal obligations of plan fiduciaries and service providers under ERISA and asks for clarification from DOL of this approach. The participating organizations intend to publicize and distribute the model list among their respective memberships and encourage its use.

The list builds on similar efforts: for example, a model 401(k) fee disclosure form that the Institute and other groups developed and the supplemental schedule developed by the Institute last year to disclose payments among service providers. The new 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.

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