The Service Provider Disclosure Review is a formal, written checklist driven assessment for determining fee reasonableness and necessity under the ERISA 408(b)(2).
The assessment is a written engagement between the 401(k) plan and CEFEX, the Centre for Fiduciary Excellence, an independent global assessment and certification organization. CEFEX conducts assessments according to the principles of the international standard ISO/IEC 17021: Conformity Assessment-Requirements for bodies providing audit and certification of management systems. These assessments are performed by Accredited Investment Fiduciary Analysts (AIFA®), designees trained by FI360 in concert with CEFEX to support the prudent practices that define a global fiduciary standard of excellence.
As CEFEX trained analysts, we conduct a plan assessment by gathering the necessary fee disclosure documents, interviewing service providers and plan sponsor representatives, providing detailed answers to checklists of questions concerning plan operation and services, fee disclosures, conflicts of interest, etc…. All documents are scanned to CEFEX and stored electronically in a secure password protected vault. Plan benchmarking reports from multiple sources are also submitted as part of the evidence.
Once the report has been submitted and examined, an independent CEFEX Review Committee moves forward with the issuance of a registered opinion letter to the plan, or submits a memo with detailed information on nonconforming practices or opportunities for improvement. In the latter case, the plan sponsor and analyst then work together to make the adjustments necessary to pass the CEFEX Review Committee scrutiny.
Once the plan fiduciary receives the registered opinion letter, the fiduciary then must affirm agreement with the findings. Consequently, the file is sent to the law firm, Drinker Biddle & Reath, LLP to issue a legal opinion to the plan.