What It Is
Schedule C, Service Provider Information, is attached to the Form 5500 of large plans. It lists the firms and people the plan paid for services during the year: the recordkeeper, advisors and consultants, the auditor, trustees and custodians, investment managers, brokers and others. For each one it shows what services they provided, using numbered service codes, and how much they were paid.
Who Files It
- Large plans only. Plans that file full financial statements on Schedule H, generally those with 100 or more participants. Small plans filing the 5500-SF or Schedule I don't file Schedule C.
- Providers paid $5,000 or more. A provider appears only if its reportable compensation from the plan, direct or indirect, reached $5,000 for the year. Smaller providers don't appear.
The Three Parts
- Part I: Service providers and their pay. The main section. Each provider's name, EIN, service codes, relationship to the employer or other parties, direct pay from the plan, and indirect pay from other sources such as the funds the plan holds. Providers paid only certain disclosed indirect compensation may be listed more briefly.
- Part II: Providers that didn't give information. Providers who failed or refused to give the plan administrator what it needed to complete the schedule.
- Part III: Termination of the accountant or actuary. Explains why the plan's auditor or enrolled actuary was replaced.
Service Codes
Every provider in Part I is tagged with one or more two-digit codes describing what it did. These are the ones that matter most for working out who serves a plan:
| Code | Official Description | Usually Means |
|---|---|---|
| 15 | Recordkeeping and information management | The recordkeeper |
| 37 | Participant loan processing | Usually the recordkeeper |
| 64 | Recordkeeping fees | Usually the recordkeeper (an indirect-pay code) |
| 16 / 17 | Consulting (general / pension) | Consultants |
| 27 | Investment advisory (plan) | The plan's advisor |
| 26 | Investment advisory (participants) | Advice or managed accounts for participants |
| 28 | Investment management | Asset managers |
| 10 | Accounting (including auditing) | The plan's auditor |
| 14 | Plan Administrator | Third-party administrators |
| 19 / 21 | Custodial (securities) / Trustee (bank, trust company) | Custodians and trustees |
| 33 | Securities brokerage | Brokers |
Direct and Indirect Pay
Direct pay is money the plan itself paid the provider, out of plan assets. Indirect pay comes from somewhere else, most often the funds in the lineup: revenue sharing, 12b-1 fees, sub-transfer agency fees and commissions. Indirect pay is often the larger share of what a recordkeeper earns, and it's the part plan sponsors most often overlook. Codes in the 50s through 70s describe the kind of pay:
| Code | Official Description |
|---|---|
| 50 | Direct payment from the plan |
| 52 | Investment management fees paid indirectly by plan |
| 59 | Shareholder servicing fees |
| 60 | Sub-transfer agency fees |
| 63 | Distribution (12b-1) fees |
| 65 | Account maintenance fees |
| 70 | Consulting fees |
| 71 | Securities brokerage commissions and fees |
Reading It Correctly
- One firm, many names. A large recordkeeper can appear under several legal entities and spellings, sometimes on the same filing. Add them up before comparing firms.
- More than one recordkeeping code. Several providers can carry code 15 or 64. The one with the recordkeeping pay and the participant-facing codes is usually the recordkeeper.
- Switch years. In the year a plan changes recordkeeper, both firms often appear: the outgoing one paid for part of the year, the new one for the rest.
- Sold businesses. When one recordkeeper buys another, plans can keep listing the old name for a while. That's a sale, not a plan switching.
- Blanks aren't zeros. A missing amount means not reported, and a provider under $5,000 isn't listed at all.
RetireFax does this work for every large plan: it merges each firm's entities and spellings, names one recordkeeper per plan each year, follows sold books to their buyer, and shows direct and indirect pay side by side. Next: how to find any plan's recordkeeper and advisor.