Peeling Back the Fiduciary Layers and Unscrambling the Fiduciary Confusion
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In This Issue
Fiduciary and Plan Governance Material Peeling Back the Fiduciary Layers and Unscrambling the Fiduciary Confusion Summary: In seeking clarity about the "type" of 401k professional it has retained, plan sponsors often find the answers they are given to be incoherent with a slant in favor of the 401k industry instead of plan participants. The residual fuzziness plan sponsors are left feeling about this topic is a source of significant irritation to them. This comprehensive white paper attempts to peel back the fiduciary layers and unscramble the fiduciary fuzziness. Source: 401khelpcenter.com Fiduciary Reliance on Registered Investment Advisers Summary: Whether a plan sponsor is trying to minimize costs, monitor investments or improve administrative efficiencies, all plan sponsors fiduciaries must first understand their legal fiduciary responsibility under ERISA. If you are a plan fiduciary and you don't believe you are able to meet your fiduciary responsibilities under the prudent man rule with your current resources, you should consider working with a RIA. Working with an RIA can help mitigate your fiduciary responsibilities regarding the investment options in the plan, as well as providing assistance in implementing best practices and strong governance processes. Source: Multnomahgroup.com Fiduciary Warranty: Marketing Gimmick or Fiduciary Protection? Summary: This paper reviews and analyzes the various types of fiduciary warranties. It exposes various warranty deficiencies and highlights genuine benefits. Details include: The evolution of fiduciary warranties; Three types of fiduciary warranties; and, Analysis of the liabilities and benefits of each type of warranty. Source: Naplia.com (free registration may be required) Summary: Fiduciaries do need to deal with expanded liabilities from the changing regulatory and judicial landscape. Employers, plan administrators, HR staff and plan service providers should make sure that plan fiduciaries meet regularly to discuss plan business and document their deliberations. If you have any concerns about the prior conduct of plan fiduciaries, make sure you consult top notch plan service providers. Source: Retirementplanblog.com
General Items An Eye on 401k Fees - Jerry Schlichter and Fee Litigation Summary: Ensuring reasonableness and transparency of fees in 401k plans has been a hot topic for the past number of years. Jerry Schlichter was the first attorney in the U.S. to challenge 401k fee reasonability directly at the source. This is a summary of a discussion with Mr. Schlichter. Source: Ekonbenefits.com
403(b) Plans Pre-Approved 403(b) Document Program Furthers Uniformity Summary: 403(b) plan documents currently may be presented in a myriad of forms, but pre-approved prototype plans are coming, which will provide some uniformity, notes Barbara J. Webb of PenServ Plan Services, Inc. Source: Plansponsor.com The Perils of a Non-ERISA 403(b) Plan Summary: Non-ERISA 403(b) plans seem to be dropping in popularity among non-profit organizations. Given regulatory guidelines that can be difficult to follow, many plan sponsors are finding it harder to maintain a fully compliant non-ERISA plan. This article offers tips to help plan sponsors change their non-ERISA 403(b) plan to an ERISA plan and reviews compliance issues you need to consider to make this change. Source: Strategicbenefitservices.com
Insight: Studies, Research and White Papers Managing Financial Risk in Retirement and Benefits Programs Summary: This 2014 survey focuses on finance executives' increasing interest in pension de-risking strategies, explores the different options that companies are considering to enhance defined contribution plans, and reflects on how to achieve a better balance between retirement benefits and other employee benefit offerings. Twenty pages. Source: Prudential.com Canadians Now Invest 14% of Their Income Summary: Rising stock markets are boosting investor confidence and leading Canadians to increase the share of income they invest, according to the latest TD Investor Insights Index. The annual survey finds that more than half of Canadian investors saw their investments improve over the past 12 months, and nearly as many expect continued gains in the year ahead. Source: Benefitscanada.com
Items of Special Interest to Service Providers Are 401k Revenue-Sharing Deals on Their Way Out? Summary: New disclosure rules and the threat of fiduciary violation lawsuits have helped bring down investment management, recordkeeping and other fees in 401k and other retirement accounts. Now revenue-sharing is following suit. About 13% of plans had no form of revenue sharing whatsoever last year, a figure that most expect will grow. Source: Thinkadvisor.com A 401k Advisor Shouldn't Refer a TPA Just Because They're Cheap Summary: When a retirement plan advisor is more concern with low cost than the quality of service, they are likely to get a TPA that under performs for both the plan sponsor and the advisor. This article is about why retirement plan advisors should avoid recommending a TPA just because they charge low fees. Source: Jdsupra.com 'Aggressive' Compliance Enforcement a Top Concern for Employers Summary: As reports of more auditors in the field from the U.S. Department of Labor circulate the industry, advisers are increasingly concerned about compliance for their employer clients. Research from the employment and labor law firm Littler Mendelson confirms another good reason that advisers should be offering compliance help: It's a top concern for employers. Source: Benefitnews.com
Court, Legal, Legislative and Washington DC Seismic Shift for Employer Stock in ERISA Account Plans Summary: The Supreme Court's rejection of a 'presumption of prudence' switches out the well-developed jurisprudence supporting the Moench presumption for defenses that will inevitably be tested and illuminated over time. Further, it will require plan sponsors and fiduciaries to redo their defensive paradigm for offering employer stock, which was constructed around this presumption. This article provides context for the decision and notes additional detail on the case, the key takeaways and practical next steps. Source: Kilpatricktownsend.com New Case Tests the Retroactive Reach of Windsor Summary: Following a spate of district court cases in response to United States v. Windsor, some same-sex surviving spouses are asking retirement plan sponsors to review previously denied death benefit claims. Among them has emerged Passaro v. Bayer Corp. Pension Plan in which the key issue will be the retroactive application of Windsor to qualified retirement plans. Source: Benefitsbryancave.com
Compliance and Regulatory Related New QLACs Establish Foundation for DC Annuitization Summary: The IRS took a substantial step in making these DC lifetime income efforts become a reality with its publication of the final regulations establishing the "Qualified Plan Longevity Annuity Contract," or "QLAC." In order to even publish this regulation, however, the IRS had to "clear the underbrush" and resolve a number of technical issues relating to the manner in which defined contribution plans could even provide lifetime income. Source: Businessofbenefits.com IRS Issues Final Regulations Simplifying Use of Annuities in Retirement Plans Summary: The Internal Revenue Service issued final regulations relating to the use of longevity annuity contracts in defined contribution plans. These regulations provide guidance necessary to comply with the required minimum distribution rules under Section 401(a)(9) of the Internal Revenue Code applicable to a plan that holds a longevity annuity contract. Source: Practicallaw.com Targeted Revisions Could Improve Usefulness of Form 5500 Information Summary: In a two-phase online GAO survey, stakeholders identified problems with the usefulness, reliability, and comparability of data from the Form 5500. GAO recommends DOL, Treasury, and PBGC consider modifying Form 5500 plan investment and service provider fee information to address challenges, which are laid out in this report. Source: Gao.gov Delinquent Form 5500 Filers Must Also File With the IRS Summary: Due to the changes to the DOL's electronic filing system, an electronic DFVCP filing does not include all of the information required by the IRS. Therefore, in order to benefit from the waiving any late filing penalties by the IRS, plan sponsors must now meet three requirements. Source: Masudafunai.com Why Canada Needs Just One Pension Regulator Summary: While the pensions of hundreds of millions of Americans can be protected by a single statute, ERISA, Canada apparently requires 11 statutes to achieve the same results. Pension regulation is one area where Canada could benefit by following the lead of its neighbors to the south. Source: Benefitscanada.com
Marketplace News New Index Helps to Measure Americans' Retirement Readiness National Black Chamber of Commerce Endorses MassMutual as Preferred 401k Provider Transamerica Appoints New Central Division Vice President New York Life Introduces Retirement Readiness Dashboard Nominations Open for EBRI's 2014 Lillywhite Award Redhawk Partners With AdvisoryWorld to Enhance Advisors Toolset Securian Unveils RetirementGPS.com OneAmerica Introduces OneCheck Plan Health Monitoring Tools T. Rowe Price Adds BrightScope Sales Reporting Data to Retirement Platform MassMutual, BlackRock Team Up on Customized Asset Allocation Program NAPLIA and Center for Due Diligence Partner
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