May a plan administrator use a formula for reporting indirect compensation on the Schedule C that is required to be specifically reported on Line 2?
Yes. The preamble to the final amendments to regulations relating to the annual reporting requirements states that [f]ilers generally have the option of reporting a formula used to calculate indirect compensation received instead of an actual dollar amount or estimate . . .. 72 Fed. Reg. 64710, 64712 (Nov. 16, 2007). It is permissible to use a formula for reporting indirect compensation even in cases where it may be possible for the service provider to calculate a monetary amount or estimate. The Department, therefore, would not expect service providers to be identified on the Schedule C as failing to provide information necessary to complete the Schedule C merely because they provided a formula when disclosing their indirect compensation to plan administrators, including for indirect compensation that is not eligible indirect compensation.
Related Questions
- May a plan administrator use a formula for reporting indirect compensation on the Schedule C that is required to be specifically reported on Line 2?
- Are the requirements to report indirect compensation on Schedule C different for participant-selected investments through open brokerage windows?
- Is the spread earned by a broker on principal transactions involving the plan eligible indirect compensation?
