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New ERISA Reporting and Disclosure Rules and Guidance Appear to Favor VCOC/REOC Compliance Over 25% Test Reliance

The U.S. Department of Labor (DOL) has issued new guidance in the form of answers to Frequently Asked Questions relating to changes to Form 5500 (the annual report filed by ERISA plans with DOL) that it adopted in an effort to increase the transparency of direct and indirect fees and expenses borne by ERISA-covered plans in connection with their investments. To the consternation of many sponsors of investment funds that are typically exempt from ERISA regulation, these new reporting and disclosure requirements reach certain investment funds that do not hold plan assets for purposes of ERISA.

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