In the context of a plan’s investment in a “look-through” investment fund is Schedule C reporting required for fees received by persons at the lower tier funds?
For Schedule C reporting purposes, fees received in connection with a plan’s direct investment in a pooled investment fund (“top tier” fund) would be subject to Schedule C reporting to the extent the fees constitute reportable direct or indirect compensation. If a top tier investment fund makes an investment in another investment fund (“lower tier” fund), fees received by persons at the lower tier fund level in connection with the top tier fund’s investment in the lower tier fund would not be reportable compensation for Schedule C purposes. Compensation received directly or indirectly by persons at the top tier from the lower tier fund in connection with the investment of an ERISA plan or plans would, however, be subject to Schedule C reporting requirements. This FAQ does not cover situations where the top tier fund is a separately managed investment account that contain assets of an individual plan, a master trust, or is merely a vehicle through which participants in participant-direc
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