The Top Ten Fiduciary Errors
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Fiduciary and Plan Governance Material Summary: Fulfilling fiduciary responsibilities is essential, as errors can have serious consequences for both the organization and the individual fiduciaries themselves. Here are the top ten most common errors that fiduciaries make. Source: Cammackretirement.com Selecting Service Providers, Competitive Bidding, and RFP's Importance Summary: Industry expert, Roger Levy, writes about fiduciary duties and how important it is to follow a formal due diligence process when hiring service providers, including investment advisors, to a retirement plan and other institutional accounts. Source: Cloudfront.net When Procurement Is Involved in the RFP Process Summary: Frequently requests for proposals for retirement plan service providers are going through procurement departments. Procurement departments can help with the efficiency of the RFP process, but they shouldn't just be left to their own devices. Source: Plansponsor.com Six Questions to Ask at Your Next Investment Committee Meeting Summary: Every plan, and every investment committee, is unique -- and yet, conducted properly, there are inevitably areas of commonality. Here are some questions that could enhance the discussion, if not the outcome, of your next meeting. Source: Napa-net.org Addressing Retirement Plan Data Security Summary: An emerging area of compliance concern for retirement plan fiduciaries is the protection of plan data and they have an additional responsibility to protect participant data. When plan sponsors engage in a vendor search, cybersecurity risks should be addressed early on in the selection process. Source: Plansponsor.com
Insight: Studies, Research and White Papers Using Alternatives in Defined Contribution Plans Summary: Alternative investments have been used by DB plans for decades and it may be time for DC sponsors to consider a multi-alternative strategy to diversify plan line-ups. To the DC plan sponsor, offering a diversified set of alternatives can help increase the probability that participants reach their desired long-term return targets. For participants, a strategic allocation to alternatives may provide reduced volatility, a hedge against a variety of market risks and potentially improved total returns. Source: Cloudfront.net The Brokerage Option in DC Plans Summary: This paper examines the self-directed brokerage feature in defined contribution plans at Vanguard where 16% of DC plans offered a self-directed brokerage option. Larger plans were somewhat more likely to offer the feature and 28% of plan participants had access to the option. Twenty-two percent of plans with a brokerage option were law firms, and on average 7% of law firm plan assets were invested in brokerage. Source: Vanguard.com
Items of Special Interest to Service Providers Plan Sponsors' Loyalty Shows Slight Declines According to Chatham Partners Summary: Plan sponsors' loyalty to their retirement service providers has declined slightly from 2014 levels, according to Chatham Partners' annual Provider Loyalty Index. The Provider Loyalty Index measures loyalty among plan sponsors with decision-making authority for their organizations' retirement plans. Source: 401khelpcenter.com Senate Appropriations Bill Targets Fiduciary Proposal Summary: Appropriations subcommittees on Capitol Hill -- first in the House and now in the Senate -- have taken a shot at blocking the Labor Department's fiduciary proposal by denying funding for the measure. Source: Napa-net.org
Court and Legal Federal District Court Allows Most Claims to Proceed in Stable Value Product-Related Litigation Summary: In Teets v. Great-West Life & Annuity Insurance Company, the district court declined to dismiss claims under ERISA challenging the offering of an insurance company's guaranteed investment contract as an investment option to 401k plan investors. Source: Goodwinprocter.com Eighth Circuit Reinforces That Plan's Deadline for Filing Suit Controls Summary: A plan that does not specify a deadline for filing a lawsuit risks application of state statutes of limitations, which, as seen here, can be quite long. Establishing a plan-specific deadline allows the plan sponsor to impose an earlier deadline and provides uniformity for plan sponsors operating in multiple states. Source: Ebia.com Summary: The Ninth Circuit, which was the first appellate court to substantively address the Supreme Court's decision in Fifth Third v. Dudenhoeffer, has divided over the implication of Dudenhoeffer when plan fiduciaries are alleged to have breached duties by allowing a plan to hold employer stock during a time of alleged artificial inflation of the share price. Source: Goodwinprocter.com
Compliance and Regulatory IRS on Minimum Required Distributions Summary: The IRS has released its updated alert guidelines on required minimum distributions. The purpose of this worksheet and explanation is to assist the specialist in determining whether a plan satisfies the distribution requirements of Internal Revenue Code section 401(a)(9). Source: Irs.gov SEC to Examine Retirement Advice Summary: The SEC is starting a multi-year examination initiative on how broker-dealers and advisors ensure their clients are prepared for retirement. The examinations will evaluate issues such as whether registrants, advisers and broker-dealers are selecting the appropriate account for their client and whether they are performing due diligence on investment options. Source: Insurancenewsnet.com Sloppy Benefit Plan Audits Putting Employers at Risk Summary: Up until recently, employee benefit plan audits were a routine matter for CFOs -- something you had to have done each year to comply with ERISA, but nothing to worry about overmuch. Well, not anymore. Source: Cfo.com IRS Determination Letter Program to Be Curtailed Summary: The IRS plans to sharply curtail the determination letter program for all individually designed retirement plans starting in 2017. If the changes proceed as planned, sponsors of individually designed retirement plans will face significantly higher compliance risks. Source: Towerswatson.com
Marketplace News OneAmerica Acquires BMO's Retirement Services Business ForUsAll Introduces Small Business 401k Manning & Napier Launches Advisor Resources Focused on QDIA Due Diligence Arnerich Massena Announces New Leadership in Retirement Plan Services Anova Consulting Adds Three New Professionals NFP Targets the Nashville Business Community
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