Employee Retirement Income Security Act Section 408(b)(2) Regulation
Extension without change of a currently approved collection
No
Regular
06/28/2024
Requested
Previously Approved
36 Months From Approved
08/31/2024
1,877,576
1,643,991
1,281,731
1,134,055
183,826
258,506
The prohibited transaction described in section 406(a)(1)(C) of ERISA generally prohibits the furnishing of goods, services, or facilities between a plan and a party in interest to the plan. Because ERISA defines any person furnishing services to the plan as a âparty in interestâ to the plan, a service relationship between a plan and a service provider would constitute a prohibited transaction under section 406(a)(1)(C) in the absence of relief. Section 408(b)(2) of ERISA provides relief, however, for service contracts or arrangements if the contract or arrangement is âreasonable,â if the services are necessary for the establishment or operation of the plan, and if no more than âreasonableâ compensation is paid for the services. The Department's final rule under ERISA section 408(b)(2) (29 CFR 2550.408bâ2) requires reasonable contracts or arrangements between employee pension benefit plans and certain providers of services to such plans include specified information to assist plan fiduciaries in assessing the reasonableness of the compensation paid for services and the conflicts of interest that may affect a service provider's performance of services.
The Department also issued a class prohibited transaction exemption as part of the final rule. The class exemption grants plan fiduciaries relief from liability for a prohibited transaction resulting from the service provider's failure to comply with the regulation's disclosure requirements. The Department recognizes that a plan fiduciary may on occasion unknowingly enter into a contract or arrangement that does not meet the requirements of the regulation for relief under ERISA section 408(b)(2), in the reasonable belief that the service provider has divulged the requisite information. If the requirements of the rule are not satisfied, a prohibited transaction occurs for both the service provider and the plan fiduciary, but for the availability of the class exemption.
US Code:
29 USC 1108
Name of Law: Employee Retirement Income Security Act
The hour and cost burden estimates have been updated to reflect the most current data available regarding the number of plans and service providers in the retirement universe, as well as updated labor cost rates, postage rates, and electronic disclosure rates. As a result, the number of responses increased by 233,585 and the hour burden increased by 147,676. The cost burden decreased by $74,680.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
1210-0133 408b(2) Supporting Statement 04-11-24 Clean.docx
Class Exemption Notice to Department of Labor, EBSA