Good Faith Compliance Standard Announced for Broker Compensation Disclosure Requirements
The DOL issued Field Assistance Bulletin No. 2021-03 on December 30, 2021, announcing a new temporary enforcement policy related to broker compensation disclosure requirements. The new policy provides that the DOL will not exercise enforcement action against plan service providers or fiduciaries that comply with the new rules using a “good faith, reasonable interpretation of ERISA.
In announcing this policy, the DOL expressly acknowledges that disclosures will look different for different types of compensation arrangements. However, the DOL emphasizes that disclosure must include information about indirect compensation, stating that “the Department is of the view that a significant goal of the new disclosure requirements is to enhance fee transparency, especially for service arrangements that involve payment of indirect compensation.” The guidance also addresses the following open questions about the disclosure requirements...