Reaction to the DOL's Re-Proposed Fiduciary Rule
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In This Issue
Reaction to the DOL's Re-Proposed Fiduciary Rule
DOL to Re-Propose Fiduciary Rule for Retirement Advisors Summary: A revised Department of Labor proposal, now under review, remains highly contentious. The review by the Office of Management and Budget is a precondition to formally issuing a proposed rule, expected later this year. Rule still a contentious issue.
Source: Shrm.org
NAPA Reacts to White House Push on DOL Fiduciary Rule Summary: The National Association of Plan Advisors (NAPA) issued this statement in response to the delivery of a new version of the fiduciary rule proposal to the Office of Management and Budget for review.
Source: 401khelpcenter.com
Major Groups Applaud President's Support of DOL's Fiduciary Rule Summary: The seven organizations that launched the SaveOurRetirement.org campaign applauded President Obama's public support today for the Department of Labor's (DOL) proposed rule to limit conflicts of interest, increase accountability, and strengthen protections for Americans receiving retirement investment advice.
Source: 401khelpcenter.com
SEC's Gallagher: Fiduciary Rulemaking a "Runaway Train" Summary: The DOL's much-anticipated fiduciary reproposal drew intense criticism Feb. 20 from SEC Commissioner Daniel M. Gallagher. Gallagher's comments, made at the "SEC Speaks in 2015" event, were particularly harsh. Not only regarding the potential impact of the DOL's proposed extension of ERISA's fiduciary definition, but also on the process undertaken thus far in pursuit of its implementation.
Source: Napa-net.org
The DOL Re-Proposes the "Fiduciary Rule" Summary: Currently, investment advisers and brokers are subject to different standards of care when providing investment advice. Post describes these different standards and postulates that a uniform "fiduciary standard is the first step in the right direction."
Source: Axiaadvisory.com
The Two Faces of a Fiduciary Standard: Positive and Punitive Summary: Don Trone writes, "As I considered the President's remarks, it occurred to me that there are two faces to a fiduciary standard -- Positive and Punitive -- and it's critical that the industry be able to distinguish between the two." Read his take here.
Source: 401khelpcenter.com Summary: Ron Rhoades writes, "While I appreciate Don Trone's work in the fiduciary movement, his recent opinion in RIABiz, headlined Why Obama and the DOL are all wet when it comes to the proposed fiduciary rule, is ill-informed in part and premature in part."
Source: Riabiz.com
403(b) Plans
403(b) Plans and Auto Enrollment Summary: Automatic enrollment and escalation programs have been well-received in the 401k market and are fast becoming a plan design standard. Auto enrollment plans have generally seen very high participation rates and very low opt-out by participants. The same cannot be said of public school supplemental retirement plans where enrollment rates are relatively low due in large part to history and circumstance. Perhaps now is the time to consider implementing some of these "auto" programs to boost participation and savings rates.
Source: Valic.com
403(b) ACP Testing After a Merger Summary: Other than the change in the name of the plan sponsor to reflect the merger, nothing has changed in our 403(b) plan as a result of the merger. How is ACP testing affected, if at all?
Source: Plansponsor.com
Fiduciary and Plan Governance Material
How Long Should an Investment Policy Statement Be? Summary: There is no one right way to write an IPS. There is no prescribed set of topics that need to be included. The length of an IPS can be whatever is right for the advisor and the client. For that reason, the appropriate length of an IPS rests with what needs to be said and how detailed the discussion of the selected topics need to be.
Source: Fi360.com
Why Directors Should Avoid Duties That Will Subject Them to ERISA Summary: This article discusses the ways in which board oversight of a company's pension and other retirement plans can be exercised to avoid subjecting board members to ERISA's fiduciary standards, which are more restrictive than those imposed on directors generally. Complying with these more restrictive standards can lead to potential conflicts with a director's overall responsibility to the corporation and its shareholders.
Source: Shearman.com
401k Plan Benchmarking Measures Summary: Benchmarking a 401k plan gives retirement plan fiduciaries a clear understanding of the costs associated with running and maintaining their offering. By going through the process of benchmarking your plan, to see how it compares with others of a similar size and/or type, you often will be able to measure participant saving and investing metrics, quantify the fees you are paying and determine whether those expenses are reasonable.
Source: Plansponsor.com
The Blindsided Fiduciary: Ignorance Is Not Bliss Summary: Alliance Bernstein recently released the shocking result of a survey it had taken of plan sponsors: a whopping 37% of those fiduciaries surveyed didn't know that they were fiduciaries. It is possible to be an ERISA fiduciary and not know it, because no acknowledgement of fiduciary status is required. Article has a short checklist of people who are or are not fiduciaries.
Source: Pensionsbenefitslaw.com
Insight: Studies, Research and White Papers
Total 401k Plan Fees Remain Flat Summary: The average total plan cost for a 401k retirement plan remained flat over the past year, while underlying investment fees declined according to 401ksource.com.
Source: 401khelpcenter.com
Canadians Need Help With Their Retirement Portfolios Summary: Half of Canadians say they need help with their retirement portfolios, finds a BMO Global Asset Management study. When asked to identify the top retirement planning issues where they need help, 56% say they need assistance with deciding which investments best suit their needs.
Source: Benefitscanada.com
Items of Special Interest to Service Providers
SEC Reports on Adviser Cyber-Risk Readiness Summary: A Securities and Exchange Commission review of the financial services industry's cybersecurity preparedness shows the vast majority of examined broker/dealers and advisers have adopted written information security policies.
Source: Planadviser.com
General Items
RadioShack Workers Will Lose Their Jobs and Their Retirement Summary: RadioShack workers won't be just losing their jobs as a result of the company's bankruptcy filing, but a big chunk of their retirement savings as well. As was the case with Enron, employee contributions to their 401k accounts were matched with company stock.
Source: 401khelpcenter.com
Simple IRA, Simple 401k, Safe Harbor 401k and QACA Chart Summary: This chart, prepared by McKay Hochman, compares the features of Simple IRA, Simple 401k, Safe Harbor 401k and Qualified Automatic Contribution Arrangement plans.
Source: Mhco.com
Compliance and Regulatory Related
Video: When Is a Plan Audit Required? Summary: This 1.55 minute video looks at the question, "When exactly is a retirement plan audit required?"
Source: Erisasunscreen.com
ASPPA GAC Files Comment Letter on Proposed Form 5500 Changes Summary: ASPPA's Government Affairs Committee recently filed comments with the IRS regarding proposed changes to IRS Form 5500. Under the proposal, new questions will be added to the form and/or its schedules for plan years beginning in 2015.
Source: Asppa.org
Marketplace News InHub Consultant eRFP Platform Debuts Vanguard Makes Strategic Changes to TDF Series First 2015 ERISA Advisory Council Meeting Scheduled
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