Proposed Amendment of ERISA section 408(b)(2) Regulation

Forms and Documents

Document	Type	Status	Availability

No forms / supporting documents in this ICR. Check IC Document Collections.

IC Document Collections

IC ID	Collection	Type	Status	Form
182240	Proposed Class Exemption Notice to Department of Labor		New
182238	Proposed Class Exemption Notice to Service Providers		New
182236	Proposed Rule Disclosure Notices		New

ICR Details

OMB Control No: 1210-0133	ICR Reference No: 200710-1210-001
Status: Historical Inactive	Previous ICR Reference No:
Agency/Subagency: DOL/EBSA	Agency Tracking No: 1210-AB08-zA13
Title: Proposed Amendment of ERISA section 408(b)(2) Regulation
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Comment filed on proposed rule	Conclusion Date: 12/03/2007
	Date Received in OIRA: 10/04/2007
Terms of Clearance: The information collection requirements associated with this proposed rule are not approved at this time. EBSA will consider any public comment on these requirements and resubmit at the final rule stage.

	Inventory as of this Action	Requested	Previously Approved
Expiration Date		36 Months From Approved
Responses	0	0	0
Time Burden (Hours)	0	0	0
Cost Burden (Dollars)	0	0	0

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Abstract: The proposed ERISA section 408(b)(2) regulation would provide relief for certain arrangements between plans and service providers that ERISA section 406(a)(1)(C) otherwise proscribes. To obtain this relief, the arrangement between a plan and a service provider must satisfy several criteria: the services must be necessary for the establishment or operation of the plan and the plan may pay no more than reasonable compensation for the services. The Department is also proposing a prohibited transaction class exemption in conjunction with the proposed regulation. The class exemption would grant plan fiduciaries relief from liability for a prohibited transaction resulting from the service provider’s failure to comply with section 408(b)(2). The Department recognizes that a plan fiduciary may on occasion unknowingly conclude 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 already divulged the requisite information. This act would constitute a prohibited transaction by both the service provider and the plan fiduciary, but for the availability of the proposed class exemption. Under the proposed regulation, for a contract or arrangement to be “reasonable,” a potential service provider must disclose to a plan in writing certain information before the plan may enter into, extend, or renew the contract or arrangement. This required information comprises all compensation the plan will owe the service provider under the contract or arrangement and any conflicts of interest that could adversely affect the service provider’s performance. Failure to comply with the proposed regulation would result in a prohibited transaction both under ERISA section 406(a) (1) (C) and under section 4975(c) (1) (C) of the Internal Revenue Code.

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Authorizing Statute(s): US Code: 29 USC 1108 Name of Law: Employee Retirement Income Security Act
  

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
1210-AB08	Proposed rulemaking

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 3

IC Title	Form No.	Form Name
Proposed Class Exemption Notice to Department of Labor
Proposed Rule Disclosure Notices
Proposed Class Exemption Notice to Service Providers

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Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Changing Regulations

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: The increase in burden occurred, because the Department believes that the proposed regulation will enhance plan sponsors’ and fiduciaries’ understanding of the fees for services that employee benefit plans pay, directly and indirectly. Greater knowledge of such fees among sponsors and fiduciaries will in turn increase efficiency and competition in the service provider market, thereby generating benefits to plans and thus to plan participants. Although the Department believes this rule will have the greatest effect on service providers to pension plans, the Department has determined that other employee benefit plans, such as health and welfare plans, could realize similar benefits as a consequence of the proposed regulation.

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Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Is the Supporting Statement intended to be a Privacy Impact Assessment required by the E-Government Act of 2002? No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? Uncollected

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? Uncollected

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? Uncollected

Is this ICR related to the Pandemic Response? Uncollected

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Common Form ICR:  No

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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:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(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;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

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.

Certification Date: 10/04/2007

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