Does ERISA preempt state laws affecting covered service provider (CSP) contracts?
No. Although ERISA includes a broad preemption provision that generally preempts state laws that “relate to” retirement plans covered by ERISA, the regulations do not preempt any state law provision that governs disclosures by CSPs, except to the extent the state law prevents the application of the regulatory requirements. Thus, a state law may impose more burdensome (e.g., additional) requirements, but may not permit a CSP to avoid the application of the regulations. Example: State M law imposes a requirement that a service provider to a retirement plan have a written contract with the plan. A CSP working in State M must comply with the state law, even though the DOL service provider fee disclosure regulations do not require a written service provider contract, and instead only require the written disclosures previously discussed in these Technical Updates. Example: State N law permits verbal contracts for services to be enforceable, provided the parties to the contract have a mutual
