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 “party in interest” 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 “reasonable,” if the services are necessary for the
establishment or operation of the plan, and if no more than
“reasonable” compensation is paid for the services. The
Department's final rule under ERISA section 408(b)(2) (29 CFR
2550.408b–2) 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