The plan sponsor Task Force on ERISA Fees Disclosure and Conflicts of Interest has identified several steps that a fiduciary of a 401(k) plan should take in order to prepare for the Department of Labor's Regulation 408(b)(2). The Investment Fiduciary Leadership Council ("IFLC") started the task force in September 2008. Its purpose is to develop for companies that sponsor ERISA qualified benefit plans a process standard for testing the reasonableness of service providers' fees and controlling conflicts of interest.
Plan sponsors have a sincere desire to know what their employees pay for their 401(k) program. Yet finding out if the costs are reasonable is not so easy.
At a recent meeting of Task Force members, Roland|Criss unveiled a five step program for plan sponsors that mirrors the supply chain management process found in ISO standards. The draft of the program contains details on how to conclude if 401(k) plan fees are reasonable. It also proposes a method to evaluate the conflicts of interest disclosures required in the new regulation. The Task Force is evaluating the Roland|Criss draft and will likely refine it for adoption and release to fiduciary organizations.
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