Fee Equality: Leveling the Playing Field for Participants
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In This Issue
Insight: Studies, Research and White Papers
Fee Equality: Leveling the Playing Field for Participants Summary: Employers don't usually intend to charge fees unfairly, but may be surprised to know that fees are often inadvertently structured inequitably. Fee equalization can eliminate fee imbalances across the participant base to help plan sponsors embed fundamental fairness into the plan. This paper examines the ways in which traditional fee structures create imbalances among participants and consider ways to equalize fees.
Source: Am-a.com
More Canadians Expect to Delay Retirement Summary: More employees expect to retire later than originally planned, according to a survey. The Canadian Payroll Association's sixth annual National Payroll Week Research Survey finds that 79% of employees expect to delay retirement until age 60 or older, up from 70% over the past three years. The number one reason cited for retiring later in life is that employees are not able to save enough money.
Source: Benefitscanada.com
The New Era of Fee Transparency: Making Sense of the Details Summary: Assessing the reasonableness of fees as a result of 408(b)(2) regulations has put an increased burden on the already busy shoulders of retirement plan sponsors. Yet one of the most important fiduciary responsibilities of plan sponsors is to understand the services being provided and ensure that the fees charged to the plan are reasonable. This paper will help you build best practices for evaluating plan fees and determine whether you are striking a balance between the fees you pay and services you receive.
Source: Baml.com Summary: This is a white paper co-authored by Manning & Napier and Drinker Biddle on the importance of helping plan fiduciaries to better understand appropriate QDIA selection and best practices for their plans.
Source: Manning-napier.com
General Items
Implementing an Effective Benefits Communication Campaign Summary: Simply defined, a communication campaign is a structured, timed rollout of important information in advance of a critical date. Not only will a campaign increase appreciation and use of the plan, a good communications campaign can help determine whether the dollars the company invests in benefit plans is a good return on investment. Lead article in this newsletter lays out detailed steps on how to plan and produce an effective campaign.
Source: Wellsfargomedia.com
Retirement Plan Leakage and Retirement Readiness Summary: There is no clear answer to the retirement plan "leakage" problem. A good plan design can greatly influence the behavior of its participants. It has to include and encourage regular employer and employee contributions to help build retirement accounts. Withdrawal provisions and loans in plans don't signify poor plan design, but tighter administrative controls around the plan provisions helps keep money in the plan.
Source: Retirementtownhall.com
ERISA's Rich History: A Conversation With Phyllis Borzi Summary: Phyllis C. Borzi, assistant secretary of labor of the Employee Benefits Security Administration, sat down with Kristen Ricaurte Knebel of Bloomberg BNA recently to discuss where ERISA was, how far it has and hasn't come and what might need to be done to bring the law into the future.
Source: Bna.com
Fiduciary and Plan Governance Material
Signature Authority Can Trigger ERISA Fiduciary Responsibility Summary: Although the ERISA discretion requirement is still in limbo, CEOs and other company officers responsible for ERISA-governed plans who do not want to be plan fiduciaries should consider segregating plan assets and having only plan fiduciaries serve as signatories on the plan's bank accounts to avoid potential fiduciary liability under ERISA.
Source: Benefitsbryancave.com
Key Principles for Fiduciary Best Practices and an Emerging Profession Summary: Fiduciary law is complex in its nuances and structures; fiduciary principles are not so complex. This nine page white paper about fiduciary best practices, puts an emphasis on addressing conflicts of interest, the reasonableness and transparency of fees and expenses, and communications that are clear, complete and truthful.
Source: Thefiduciaryinstitute.org
How Bundled Services in Retirement Plans Are Like Fast Food Value Meals Summary: Author writes, "Very few plans take advantage of everything they pay for when it comes to bundled services. As a plan fiduciary, you should be asking your plan's vendors to break out its fees for each desired and necessary service, so you can then make a determination of reasonableness."
Source: Pension-consultants.com
How 3(38) Investment Managers Can Lessen Plan Sponsor Risk Summary: One way employers should consider mitigating risk is by delegating investment decisions, such as selecting, monitoring and replacing the plan's investments, to a 3(38) fiduciary.
Source: Pension-consultants.com
Items of Special Interest to Service Providers
Bob Reynolds and the 'Great West' Brand Summary: Bob Reynolds has done the easy part. With the stroke of a pen the president and chief executive of Great-West purchased the 401k business of J.P. Morgan, thus gaining traction on an otherwise impossible foothold in the mega-plan business. Now comes the awkward part, but the chief executive sees upside opportunities in bringing all three retirement divisions under one banner.
Source: Riabiz.com
Acquisition Best Practices Can Boost ROI Summary: Financial advisers looking to purchase or merge with another practice must implement some key best practices to ensure the acquisition is successful, according to NFP Advisor Services.
Source: Planadviser.com
Business Continuity Plan, Including Succession Plan Summary: The North American Securities Administrators Association proposed a model rule requiring investment advisers to create and implement written procedures to address business continuity and succession planning in the event of the owner's and other key personnel's untimely departure or a natural disaster. With this proposal NASAA has caught up with the SEC requirements for federally registered investment advisers to establish business continuity and disaster recovery plans.
Source: Ria-compliance-consultants.com
Court, Legal, Legislative and Washington DC
The Case of the Accidental Fiduciary: When a Signature is More Than Just a Name Summary: The issue of fiduciary status is often cumbersome, because while a fiduciary can be directly named by a plan, someone can also be deemed to be a fiduciary by virtue of just having some discretionary authority. Perez v. Geopharma seems to suggest that at least some argument can be made that even company officers could be liable for fiduciary breaches.
Source: Foxrothschild.com
Retirement Reform Bills Seek More 'Open' Plans Summary: Retirement reform bills in Congress loosen restrictions around multiple-employer benefit plans, making it easier for employers to transfer many of the fiduciary responsibilities and liabilities associated with such plans.
Source: Insurancenewsnet.com
Compliance and Regulatory Related
New Money Market Fund Rules Require Review by Retirement Plan Sponsors Summary: The SEC recently amended the rules governing money market funds in an effort to increase the stability and liquidity of these funds in times of economic stress. Retirement plan fiduciaries have an obligation to consider whether to continue utilizing money market funds in light of the likely increases in expenses, potential limitations on liquidity and administrative challenges under the new money market rules.
Source: Mwe.com
Retirement Plan Reporting and Disclosure Summary: Retirement plans must file certain forms and reports with the IRS and the DOL and send out notices to plan participants and certain others. Different reporting and disclosure requirements apply depending on the type of plan and the plan's circumstances. This is an information page prepared by the IRS.
Source: Irs.gov
SEC Money Market Reform: An Analysis of Fund Director Responsibilities Summary: In July 2014, the SEC adopted long-awaited rule amendments to regulations that govern money market funds. The Rules will require action on the part of every board of a registered money market fund to some degree. Some of the more important and more immediate considerations are highlighted in this piece.
Source: Drinkerbiddle.com
DOL Revises Guidance on Missing Plan Participants Summary: The DOL recently updated its guidance concerning plan sponsors' and fiduciaries' responsibilities in locating missing retirement plan participants. In Field Assistance Bulletin 2014-01, DOL updated its guidance from 2004 to reflect the availability and improvement of internet search technologies, as well as the discontinuance of both the Internal Revenue Service's and Social Security Administration's letter forwarding services.
Source: Eisneramper.com
Marketplace News iSectors Opens Collective Investment Fund for DC Plans USI Consulting Offers Retirement Planning and Consultation Services TIAA-CREF Launches Website for Plan Sponsors CAPTRUST Expands Into Missouri Arnerich Massena Adds to Institutional Client Group Envisage Boosts Support for 401k Technology Development Operations DOL's ERISA Advisory Council to Hold Open Meeting Sept. 29 Great-West Names Ed Murphy Head of Newly Combined Retirement Group Benefit Plans Plus Releases Mobile App for Retirement Plan Advisors Aspire Unveils Enhanced 403(b) Portal The Standard Appoints New Retirement Plan Consultant in St. Louis Office
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