Safeguarding Your Plan From Fraud
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In This Issue
Compliance and Regulatory Safeguarding Your Plan From Fraud Summary: Have you reported a plan loss due to fraud or dishonesty on your annual Form 5500 return? The Internal Revenue Service found that Plan Sponsors are, in fact, reporting such losses on the Form 5500 at a troubling rate. Article offers some suggestions to protect against fraud/dishonesty losses. Source: Consultrms.com On Float Generated by Funds Awaiting Disbursement From 401k Plans Summary: Whether or not float generated by Funds awaiting disbursement is treated as a plan asset, plan sponsors and their advisors should be aware that this float will continue to be viewed as a component of a service provider's compensation. Accordingly, plan sponsors always will have a duty to ensure that this compensation, including float, does not exceed reasonable levels. Source: Wagnerlawgroup.com Is Your ERISA Fiduciary Liability Insurance Up to Date? Summary: ERISA fiduciary liability insurance policies protect fiduciaries and trustees of ERISA plans from personal liability. Companies should evaluate their policies and consider, depending on their needs, whether the items noted in this article are covered and/or should be covered under their policies. Source: Haynesboone.com
Fiduciary and Plan Governance Material What Retirement Plan Committees Should Know and Discuss Summary: Retirement plan committees need knowledge and continuing education about a number of key subjects. And they need ongoing support to stay abreast of industry regulations and trends. Source: Plansponsor.com The Duty of Prudence and the Net Cost of Investments Summary: The Supreme Court decision in Tibble v. Edison International held that 401k plan fiduciaries have a duty to prudently monitor a plan's investment options ... in this case, whether retail or institutional share classes were prudent for the Edison plan. What does that mean for 401k plans? Source: Drinkerbiddle.com
403(b) Plans A Way Around Costly 403(b) Plans Summary: In so-called 'open vendor' states, high-cost 403(b) plans may be side-stepped by turning to 457(b)s, explains plan-participant advocate Steve Schullo. Source: Morningstar.com
Insight: Studies, Research and White Papers Redefining the Retirement Plan Summary: This paper is a guide to trends and strategies to help employers get the most out of their defined contribution programs. Defined benefit plans and Social Security were the simple answer to retirement for the past century. Life expectancy has improved though and an added strain has been placed on plan sponsors to help their employees replace their incomes in retirement. Fortunately, employers are equipped with more tools than ever before to help their employees retire with dignity. Source: Axiaadvisory.com (registration may be required) Locked Out of Retirement: The Threat to Small Business Retirement Savings Summary: The DOL is expanding the definition of fiduciary invest. advice under a federal law known as ERISA. The result would be that many traditional forms of compensation, such as commissions that vary from one investment to another, for financial advisors could become illegal under special provisions in that law called "prohibited transactions." According to this 13 page paper, a number of aspects of the proposal appear unworkable in actual practice, and would negatively impact how advisors assist small businesses in providing retirement benefits for their employees. Source: Centerforcapitalmarkets.com
Items of Special Interest to Service Providers 401k Service Models: The Complete Guide Summary: As you move up-market, you have to provide a more robust suite of services in order to be competitive, provide the additional support larger plans need, and keep your competition out. But how do you create a service process that's appropriate for the market you're in? Source: 401kbestpractices.com 66,000 401k Plans Up for Grabs in 2015, Cogent Reports Summary: Just over one in ten (11%) of 401k plan sponsors report they are very likely to replace their current recordkeeper sometime over the next 12 months. The likelihood of switching is highest among Mid-sized (13%), Large (20%) and Mega (18%) plans. These figures put the total estimated number of current plans likely to turn over at 66,000. Source: 401khelpcenter.com SEC Proposes Changes to Form ADV Summary: The SEC proposed amendments to Form ADV and Rule 204-2 under the Investment Advisers Act of 1940. The proposed amendments would require investment advisers to provide additional information on Form ADV. Source: Thompsonhine.com
Court and Legal Stuck in the Mud or Road to Success? DC Plans and Fee Lawsuits Summary: The message is clear for DC plan sponsors: follow best practices established for plan fees or risk getting stuck in a costly and time-consuming lawsuit. In this article, Callan describes select fee lawsuits and best practices to help plan sponsors stay on the path to success. Source: Callan.com SCOTUS Invites Solicitor General to Submit Its View on ERISA Venue Selection Provisions Summary: With a petition for certiorari pending, the U.S. Supreme Court has asked the Solicitor General to file a brief expressing the government's views on whether "ERISA's special venue provision and a plaintiff's choice of venue under that provision, may be abrogated by a more restrictive venue-selection clause in an ERISA plan." Source: Erisapracticecenter.com Eighth Circuit Rules That Taxpayer Engaged In a Prohibited Transaction Summary: In Ellis v. Commissioner of Internal Revenue, the taxpayers were appealing from the decision of the tax court finding a deficiency in their income taxes and imposing related penalties. Upon reviewing the case, the Eighth Circuit Court of Appeals concluded that taxpayer engaged in a prohibited transaction when he used an IRA to fund a business which paid him wages. Source: Erisalawyerblog.com The Supreme Court Upsets Precedent in Fourth and Eleventh Circuit Summary: The Eleventh and Fourth Circuit Court of Appeals definitively rejected the "continuing breach" theory in recent disputes involving statute of limitations deadlines in ERISA cases alleging fiduciary breach claims. This precedent was short-lived. Source: Southeastern ERISA Watch
Marketplace News Chicago Based Firm Specializing in Plan Audits Launches SageView Expands Into Colorado MassMutual Launches New Employee Benefits Guidance Tool LifeLock Introduces 401k Theft Protection BrightScope Launches "Fund Pages" Gallagher Adds Positions as Part of Continued Expansion GRP Advisor Alliance Teams With Financial Finesse Fiduciary Liability Insurance Offered in Canada ProCourse Fiduciary Advisors Announces New Louisville Office Software Maker SunGard Data Systems files for IPO Pensionmark's Expansion Continues With New Cleveland Office EPIC Advisors Names Marques President The Spark Institute Names New Executive Director The Spark Institute Announces New Award Program
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