29 CFR 2550.408c-2 - Compensation for services.

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There is 1 rule appearing in the Federal Register for 29 CFR Part 2550. View below or at eCFR (GPOAccess)
§ 2550.408c-2 Compensation for services.
(a) In general. Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (the Act) refers to the payment of reasonable compensation by a plan to a party in interest for services rendered to the plan. Section 408(c)(2) of the Act and §§ 2550.408c-2(b)(1) through 2550.408c-2(b)(4) clarify what constitutes reasonable compensation for such services.
(b)
(1) General rule. Generally, whether compensation is “reasonable” under sections 408 (b)(2) and (c)(2) of the Act depends on the particular facts and circumstances of each case.
(2) Payments to certain fiduciaries. Under sections 408(b)(2) and 408(c)(2) of the Act, the term “reasonable compensation” does not include any compensation to a fiduciary who is already receiving full-time pay from an employer or association of employers (any of whose employees are participants in the plan) or from an employee organization (any of whose members are participants in the plan), except for the reimbursement of direct expenses properly and actually incurred and not otherwise reimbursed. The restrictions of this paragraph (b)(2) do not apply to a party in interest who is not a fiduciary.
(3) Certain expenses not direct expenses. An expense is not a direct expense to the extent it would have been sustained had the service not been provided or if it represents an allocable portion of overhead costs.
(4) Expense advances. Under sections 408(b)(2) and 408(c)(2) of the Act, the term “reasonable compensation,” as applied to a fiduciary or an employee of a plan, includes an advance to such a fiduciary or employee by the plan to cover direct expenses to be properly and actually incurred by such person in the performance of such person's duties with the plan if:
(i) The amount of such advance is reasonable with respect to the amount of the direct expense which is likely to be properly and actually incurred in the immediate future (such as during the next month); and
(ii) The fiduciary or employee accounts to the plan at the end of the period covered by the advance for the expenses properly and actually incurred.
(5) Excessive compensation. Under sections 408(b)(2) and 408(c)(2) of the Act, any compensation which would be considered excessive under 26 CFR 1.162-7 (Income Tax Regulations relating to compensation for personal services which consitutes an ordinary and necessary trade or business expense) will not be “reasonable compensation.” Depending upon the facts and circumstances of the particular situation, compensation which is not excessive under 26 CFR 1.162-7 may, nevertheless, not be “reasonable compensation” within the meaning of sections 408(b)(2) and 408 (c)(2) of the Act.
[42 FR 32393, June 24, 1977]

Title 29 published on 2013-07-01.

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  • 2015-03-19; vol. 80 # 53 - Thursday, March 19, 2015
    1. 80 FR 14301 - Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans—Timing of Annual Disclosure
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      DEPARTMENT OF LABOR, Employee Benefits Security Administration
      Direct final rule.
      Effective date: This rule is effective June 17, 2015, without further action or notice, unless significant adverse comment is received by April 20, 2015. If significant adverse comment is received, the Employee Benefits Security Administration (EBSA) will publish a timely withdrawal of the rule in the Federal Register . Applicability date: The amendment is applicable to disclosures made on or after June 17, 2015.
      29 CFR Part 2550

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Title 29 published on 2013-07-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 29 CFR Part 2550 after this date.

  • 2015-04-20; vol. 80 # 75 - Monday, April 20, 2015
    1. 80 FR 21960 - Proposed Best Interest Contract Exemption
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      DEPARTMENT OF LABOR, Employee Benefits Security Administration
      Notice of Proposed Class Exemption.
      Comments: Written comments concerning the proposed class exemption must be received by the Department on or before July 6, 2015. A pplicability: The Department proposes to make this exemption available eight months after publication of the final exemption in the Federal Register . We request comment below on whether the applicability date of certain conditions should be delayed.
      29 CFR Part 2550