ERISA Disclosures for Discretionary Investment Managers

Covered service providers must make their 408(b)(2) disclosures by July 1, 2012—just weeks away. The failure to make those disclosures will cause their agreements with ERISA plans to become prohibited transactions, resulting in re-payments of compensation to the plans, taxes, interest and penalties.

In our experience, some categories of covered service providers are not generally aware of these requirements. One of those categories is investment managers who exercise discretion over plan investments. We are most concerned about the investment advisers who manage individual securities inside “pooled” plans, such as profit sharing and pension plans.

Those investment advisers are “covered” service providers both because they are acting as investment advisers registered under the securities laws and because they are acting as ERISA fiduciaries (by exercising discretionary control over plan assets). As a result, they need to make these service, status and compensation disclosures required by the 408(b)(2) regulation.

Because of our concerns, we recently wrote a bulletin about investment managers and their 408(b)(2) issues. The bulletin can be located at:


The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

The views expressed in this article are the views of Fred Reish, and do not necessarily reflect the views of Faegre Drinker.