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The purpose of this paper is to analyze recent regulations and proposed regulations issued by the US Department of Labor (DOL) that relate to the reporting of compensation paid to service providers to employee benefit plans.

The paper reviews the statutory provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA), applicable DOL regulations as available in the Federal Register and certain public comments and a DOL FAQs document regarding the applicable regulations available on the DOL's web site. The paper also relies on observations of common market practice based on actual experience.

Recent DOL regulations – in particular those related to Form 5500 reporting and the “Necessary Services Exemption” – may significantly affect the reporting obligations of certain private investment fund sponsors with respect to their employee benefit plan investors. It shows that, although the scope of these regulations is understandable in the context of participant‐directed defined contribution plans, they may be less so in the context of defined benefit plans, which invest more frequently in private investment funds. There are some potential exceptions, on which private investment fund sponsors may be able to rely. Achieving compliance with the rules as drafted, however, may be time‐consuming and costly.

Private investment fund sponsors may wish to begin looking at their compensation and service provider arrangements in light of these regulations and consider how best to respond.

The paper contains two experienced ERISA practitioners' analysis of recent regulations on which relatively few stakeholders have seemed to focus to date.