RIA Recordkeeping Requirements
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Items of Special Interest to Advisors RIA Recordkeeping Requirements Summary: Rule 204-2 (the "Books and Records Rule") under the Investment Advisers Act of 1940 requires investment advisers registered with the U.S. Securities and Exchange Commission to make and keep true, accurate, and current certain books and records relating to its investment advisory business. Source: Ria-compliance-consultants.com The Evolution of Retirement Plan "Salesmanship" Summary: Presenting metrics and capabilities as your value proposition requires salesmanship. Selling a concept such as your ability to utilize those tools to improve outcomes is an art form. When prospecting, one concept to emphasize is PAC -- passion, conviction and authenticity. So how do you weave PAC and a sense of advocacy into your sales process? Source: Napa-net.org Higher Education Institutions Are Increasingly Seeking Services of Financial Advisors Summary: Transamerica Retirement Solutions found that an increasing number of Higher Education institutions are seeking the services of financial advisors and consultants to enhance the retirement readiness of their employees. Source: 401khelpcenter.com
Compliance and Regulatory Related IRS Announces That It Will Recognize All Same-Sex Marriages Summary: After months of speculation, the Internal Revenue Service published guidance on August 29, 2013 regarding the treatment of same-sex spouses under the Internal Revenue Code. In Revenue Ruling 2013-17, the IRS confirmed that it will consider a same-sex couple married for federal tax purposes if they were married in a state or foreign country that recognizes same-sex marriage regardless of where the couple resides. Source: Employeebenefitscounsel.com Treasury Department and IRS Issue Priority Guidance Plan Summary: The U.S. Department of the Treasury and the Internal Revenue Service released their annual Priority Guidance Plan for the July 2013 to July 2014 fiscal year. The Plan lists 324 project priorities and provides a helpful insight into the regulatory guidance that may soon be forthcoming. Source: Morganlewis.com Determining the Death Beneficiary Under an ERISA Plan and the Rights of Such a Beneficiary Summary: Administrators of employee benefit plans governed by ERISA, often struggle to determine who is entitled to be paid survivor benefits. Trusts and estates attorneys often struggle to determine who, if anyone, may use state law to wrest benefits from the person entitled to receive survivor benefits from an ERISA plan. Two Supreme Court decisions appeared to have resolved these issues. Source: Ssrn.com Partial Plan Terminations: Revisited Summary: This is a clarification to an earlier article on partial terminations. Author received feedback indicating that during an IRS audit of a plan that experienced a partial plan termination, an IRS agent required the employer to fully vest all participants who terminated during the plan year in which the partial termination occurred. The full vesting requirement was imposed regardless of whether the basis for the termination was voluntary or involuntary. Source: McKay Hochman
403(b) Plans Clarification Requested on Certain 403(b) Severance, Vesting Definitions Summary: ASPPA and NTSAA recommend that the IRS amend LRM 24 to clarify that, for purposes of determining whether a "Severance from Employment" has occurred, "Related Employer" status is determined under the definition previously issued in LRM 22. Additionally, they recommend that the IRS amend LRM 65 to eliminate confusion about recordkeeping requirements for nonvested amounts. Source: Asppa.org
Fiduciary Material and Insight What Do Advisors Have to Say About the Fiduciary Standard? Summary: Advisors had a chance to speak out about the fiduciary standard in the 2013 fi360-ThinkAdvisor Fiduciary Survey. What stands out in the findings is a wide gap between executives of traditional broker-dealers and the advisors at those companies who work with clients. Source: Fi360.com Understanding the Glide Path: More Than Just a Mathematical Formula Summary: Up to this point, it appears much of the fiduciary focus has been on general target-date concepts (e.g., diversification and the existence of a glide path), and not enough emphasis has been placed on understanding the factors considered and the assumptions made by providers in constructing their glide paths. Part of the solution requires increased transparency and communication from target-date providers. Source: Manning-Napier.com Do Money-Market Funds Belong in 401k's Summary: What if you as a fiduciary had the choice between two investments with almost the same level of principal and credit risk, but one had superior returns that averaged 27,000% higher the last three years, average 1,400% better over five years, and still over 200% better averaged over 10 years? Source: Marketwatch.com Do Common Benchmarks Mislead the 401k Fiduciary? Summary: Benchmarking 401k plans seems to come down to two metrics: fees and investment performance. Measuring performance has become a cottage industry. With the advent of 408(b)(2), fee analysis has suddenly become the dimension de jour. What are the real important benchmarks and how much of a burden do they have on the fiduciary duties of the 401k plan sponsor? The answers are at once both easier and more complicated than one would think. Source: Fiduciarynews.com
Insights: Studies, Research and White Papers Benefits for Same-Sex Couples: Impact of the DOMA Decision Summary: The International Foundation of Employee Benefit Plans administered a survey to measure organizations' reactions to the DOMA ruling. The survey found the majority of organizations, 77.1 percent reacted positively to the DOMA ruling, however two-thirds (66 percent) still needed further clarification and guidance on the ruling's complete impact before making major changes to their employee benefits and policies. View the survey results. Source: Ifebp.org Poll on Benefits Offered to Same-Sex Couples Summary: The ERISA Industry Committee released these results of a poll of its members regarding the Supreme Court's decision that section 3 of the Defense of Marriage Act (DOMA) is unconstitutional. This DOMA decision has had a widespread impact on the health and retirement benefits. The nine-question poll was conducted over the period August 20 to August 27. Source: Eric.org Tech-Savvy Retirement Plan Participants Remain PC in Their Device Preference Summary: Electronic tablet readers are much like mini-laptops, and a majority of defined contribution plan participants use them in many of the same ways they use their personal computers. A Millionaire Corner study, Plan Participant Social Media and Mobile Technology Usage, shows that 57 percent of defined contribution plan participants own and use a tablet, while 79 percent use personal computers or Macs to access the Internet. Seventy-one percent use smartphones. Source: Spectrem Group Target Date Mutual Funds Asset Class Return Drivers Summary: For the period ending June 30, 2013. To shed light on the source of TDF performance, this report tracks the performance of all the primary asset classes responsible for this performance. Source: Thecfdd.com Target Date Mutual Funds Average Performance Vs. Benchmarks Summary: For the period ending June 30, 2013. Compares the average performance of all TDFs to an appropriate TDF index as well as other aggregate indexes. Source: Thecfdd.com Canadian Boomers Fall Short of Retirement Savings Goals Summary: Canada's baby boomers don't have as much saved for retirement as they think they need. A BMO Wealth Institute study finds that boomers anticipate they will each require $658,000, on average, to feel financially secure. However, they've saved only an average of $228,000, a difference of $430,000. Source: Benefitscanada.com
Court, Legislative and Washington DC Ex-wives' Access to QDRO Benefits Upheld in Two Rulings Summary: Handling qualified domestic relations orders can be difficult in the best of times for retirement plan administrators. However, when a divorced participant or beneficiary seeks to change or maintain pension survivorship rights with a domestic relations order, determining the rightful beneficiary can become even more complex. Two recent federal court decisions indicate that case law may favor the ex-spouse. Source: Thompson.com
General Items Infographic: Do You Know the Potential Value of One Percent? Summary: This Fidelity infographic shows how one percent can make a big difference in a retirement paycheck, especially for your younger employees. It's time to start thinking about how retirement savings can translate to income later in life and this simple concept can help. Source: Fidelity.com T. Rowe Bans Some American Air Employees From Fund Trading in 401k Summary: T. Rowe Price has permanently banned about 1,300 American Airlines employees from trading among its funds in their 401k retirement plans, a rare move to curb "collective" trading by subscribers to an investment newsletter. Source: Reuters.com
Marketplace News CoPiloted Launches 401k Advisory Service
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