"Hard Reporting on Soft Dollars (and Other Payments): More DOL Guidance on Disclosure for Financials"

On October 23, 2009, the Department of Labor issued supplementary frequently asked questions (“FAQs”) in connection with detailed reporting requirements applicable to most plans regulated under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The FAQs follow earlier guidance from the DOL on the same subject and pertain to new reporting requirements under Schedule C of Form 5500. The reporting requirements mandate that a plan administrator report in robust detail items of both direct and indirect compensation that a plan’s service providers pay or receive. Because an administrator generally must look to a plan’s service providers (broker-dealers, investment managers, custodians, third-party administrators, record keepers etc.) in order to obtain the requisite information, many financial services companies have been developing and implementing systems to provide the data that will be required. This Stroock Special Bulletin provides an overview of the detailed reporting requirements and the FAQs, highlighting issues of relevance to broker-dealers, asset managers, plan fiduciaries and other plan service providers.