There seems to be a lot of talk in the industry about benchmarking retirement plans. This may be attributable to the new disclosure requirements under 408(b)(2), or the recent wave of retirement plan litigation related to fees. Whatever the reason, retirement plan vendor* benchmarking is all the buzz.
Furnishing goods or services between a party in interest and a retirement plan is usually a prohibited transaction under section 406(a)(1)(C) of ERISA. However, 408(b)(2) provides for a prohibited transaction exemption so long as the goods and services are necessary for the operation of the plan and no more than reasonable compensation is paid.Continue reading