Importance of Maintaining a Formal Checklist
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Fiduciary and Plan Governance Material Importance of Maintaining a Formal Checklist Summary: In today's ERISA world, if you didn't document it, you didn't do it. Watch this two minute video to learn the importance of keeping a formal checklist to maintain fiduciary responsibility. You can find a list of suggested tasks, duties and responsibilities here: 401k Plan Committee Meetings: Preparation, Execution and Agenda Suggestions Source: Erisasunscreen.com When It's Time to Fire Your Retirement Plan Providers Summary: As a retirement plan sponsor, you have to recognize when to end relationships with your plan providers because prolonging these bad relationships will only increase your potential liability as a plan fiduciary. So this article is about when you should fire your retirement plan providers. Source: Jdsupra.com When 401k Plan Sponsors Need Lawyers -- Its Not Just When Your Plan's Plumbing Needs Fixing Summary: Benefit attorneys now appear to be relegated to the role of the plumber called into "fix the leak" when things go wrong. This is not an unimportant job, but if fixing leaks is the only thing your benefits attorney is doing, they are being under-utilized and your interests as a plan sponsor are not being served as well as they might be. Source: Fiduciaryplangovernance.com Straightforward Contract Pointers for Plan Fiduciaries Retaining Service Providers Summary: If you are a fiduciary of a qualified plan, such as an ERISA plan, and you anticipate entering or renewing a service agreement with a service provider, here are a few straightforward contract pointers for you (and your professional advisers) to consider during the review process. Source: Winston.com Suitability Versus Fiduciary Standard Summary: A survey of nearly 400 investment professionals sheds new light on the potential benefits to consumers of a uniform fiduciary standard and highlight the perceived impacts of changing one's standard of care. This article focuses on those perceived impacts and a few of the potential consumer benefits, as well as provide an overview of the current and proposed regulatory landscape. Source: Fpanet.org
403(b) Plans 403(b) Plans Can No Longer Avoid Federal Government Scrutiny Summary: DOL regulations demonstrated one clear message: 403(b) plans are no longer avoiding the scrutiny of the federal government. Because an increasingly strict regulatory environment in the 403(b) arena heightens the importance of fiduciary oversight, all plan sponsors must ensure that they fully understand their responsibilities. Source: Benefitnews.com What Are the Deposit Deadlines for ERISA and Non-ERISA 403(b) Plans? Summary: The deposit timing rules that are applicable to 401k plans also apply to elective deferrals under an ERISA 403(b) plan. With regard to non-ERISA 403(b) plans, regulation section 1.403(b)-8(b) requires that deferrals to a 403(b) plan must be transferred to the insurance company within a period that is not longer than is reasonable for the proper administration of the plan. Source: Tagdata.com
Insight: Studies, Research and White Papers Canadian DB Pension Coverage Continues to Drop Summary: A fact sheet from the Office of the Chief Actuary shows that the shift to DC from DB is continuing. The proportion of active registered pension plan (RPP) members in DB plans has declined to 73% from 83% in the 10-year period between 2001 and 2011. And the reduction in DB coverage in the private sector has plunged to 51% from 74% in a decade while it has remained stable at 94% in the public sector. Source: Benefitscanada.com Study Finds Disagreement Between Couples on Retirement Summary: Fidelity Investments fourth Couples Retirement Study finds that approximately 4 in 10 working couples (38 percent) disagree on the lifestyle they expect to lead in retirement. And many couples aren't just disagreeing about their future; more than half (51 percent) admit to arguing either frequently or occasionally about money. Source: 401khelpcenter.com
Items of Special Interest to Advisors FINRA and SEC to Focus on IRA Rollover Practices in 2014 Summary: The issuance of Notice 13-45 and the inclusion of IRA rollovers as examination priorities, along with the recent GAO report discussed above, are consistent with the trend toward increasing regulatory scrutiny of the IRA market. In light of the converging regulatory scrutiny involving IRA rollovers, broker-dealers and investment advisers should consider reviewing and updating their IRA rollover practices, marketing activities, supervisory procedures, and training programs. Source: Morganlewis.com SEC's Examination Program Issues a Risk Alert on RIA Due Diligence Processes Summary: The SEC issued a Risk Alert entitled: Investment Adviser Due Diligence Processes for Selecting Alternative Investments and Their Respective Managers. While the scope of the Risk Alert is limited to a specialized sector of the adviser community, it provides interesting insight into the thinking of the SEC Staff in this important area. The practices observed by the Staff provide an interesting benchmark for advisers to consider, and the warning indicators and compliance failures provide food for thought. Source: Sutherland.com TD Ameritrade Launches a 'Goldilocks' 401k Approach Aimed at Competing With Big Wolves Summary: How participants deal with their 401k assets when they leave a company is under more scrutiny from FINRA, but retirement plan advisers are less likely to be affected by the guidance. Source: Riabiz.com
Court, Legal, Legislative and Washington DC 2014 Legislative and Regulatory Outlook Summary: Aon Hewitt's "Outlook for Legislative and Regulatory Activity in 2014" provides a summary of policy related to human resources and employee benefits. The report discusses priorities facing the 113th Congress and also includes an overview of key health care, retirement, and employment issues for 2014. Source: Aon.com Sen. Harkin Proposes Bill to Expand Workers' Access to Retirement Plans Summary: Sen. Tom Harkin unveiled long-awaited legislation that proposes to provide all workers with access to a retirement plan through automatic payroll deductions, particularly workers who currently don't have access to employer-provided retirement plans. Source: Pensionrights.org Harkin Retirement Plan Would Force Some Employers to Alter Current 401k Offering Summary: Sen. Tom Harkin's retirement plan proposal has some flaws, not the least of which is that employers who offer 401k plans would have to change their current plans to be more like defined benefit plans if they didn't want to be forced to adopt Harkin's USA Retirement Fund, according to the National Association of Plan Advisors. Source: Benefitspro.com
Compliance and Regulatory Related Full Scope vs. Limited Scope Audits in Retirement Plans Summary: Not only are audits an essential part of the ERISA reporting structure, they also provide plan sponsors with an opportunity to evaluate the adequacy and efficacy of a retirement plan's internal controls. For qualifying plans, ERISA provides an option for a limited scope audit as a less comprehensive and costly alternative to a full scope audit. This white paper provides a comparison of the major aspects plan sponsors should consider when choosing to conduct a full scope or a limited scope audit. Source: Multnomahgroup.com DOL Retirement Plan Non-compliance Fines Up 33 Percent Summary: When plans are out of compliance -- and according to Department of Labor data, the problem is getting bigger all the time -- employers or their employees are stuck paying taxes and penalties. In 2013, the DOL collected $1.69 billion in fines, voluntary fiduciary corrections and informal complaint resolutions, a 33 percent increase over 2012's $1.27 billion tab. Source: Benefitspro.com Late Deposits of Employee Deferrals: Paying the Piper Summary: The DOL has set deadlines for which salary deferrals must be deposited into the plan. If these deadlines are not met, a prohibited transaction under Section 4975 will have occurred and Form 5330 must be filed and excise taxes paid for each year or part of the year that the prohibited transaction is outstanding. Source: Belfint.com Rollovers Remain Under SEC and FINRA Scrutiny Summary: The DOL has previously provided guidance regarding the prohibited transaction rules in the context of cross-selling IRA rollovers. The DOL stated in Advisory Opinion 2005-23A a rationale for drawing a line between: 1) Investment professionals providing plan-level fiduciary advice; and 2) Investment professionals assisting a plan in a non-fiduciary capacity. However, the story does not end here. The SEC and FINRA have recently reminded the financial advisory community of their concerns about IRA rollovers. Source: Wagnerlawgroup.blogspot.com Updated Publication 560 -- Retirement Plans for Small Business Summary: The IRS has revised its Publication 560, retirement plans for small businesses. This publication discusses retirement plans employers can set up and maintain for their employees. Source: Irs.gov
Marketplace News Ascensus Creates New Organizational Structure Newport Recognized by Allianz Center for Behavioral Finance Gallagher Fiduciary Advisors Appoints Area President BrightScope Appoints New Data Solutions Group Lead Schwab Launches Full-Service 401k Program Based on ETFs Vanguard Reports Record 401k Account Balances
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