Retirement Plan Consultants/ERISA Advisor to Fiduciaries

New Publications

The Department of Labor has finally released the final final (did I say "final"?) regulations under ERISA §408(b)(2) and simultaneously extended the effective date until July 1, 2012.  Several changes from the proposed regulations should be noted:

• Certain 403(b) plans have been exempted from the regulations
• The initial disclosure by a service provider or vendor of "indirect compensation" must also include a description of the arrangement under which the service provider or vendor receives the compensation
• Annual operating expense information similar to that which must be provided to participants (under the participant disclosure regulations) must also be provided to plan fiduciaries
• Disclosure relating to investments primarily held in brokerage accounts can now be made by providing information directly from the issuer of those securities - provided the issuer is a "regulated" entity
• Errors made in disclosures can be corrected if the error was made in good faith and the corrected information is provided within 30 days of discovering the error.

Failure to comply with these regulations is at a minimum a prohibited transaction and exposes plan fiduciaries to liability for a breach of their obligations.

A copy of the regulations can be found here.  The DOL has also provide a "fact sheet" (available here) that provide some highlights of the regulations, and a list of changes (available here) that explains the changes from the proposed regulations.

If you would like to discuss how these regulation may affect you, your plan, or your practice, do not hesitate to call.

Are you ready for fee disclosure?  Plan sponsors now need to be gearing up to interpret and act on the information they are going to be receiving and, probably more importantly, be prepared to educate participants and field questions from them when fee disclosure is effective with respect to them.  Advisors can play a proactive role and cement their relationships by helping their clients through this process  For more information on preparing for fee disclosure, give us a call and schedule a time to discuss what you need to know.

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The DOL has issued it's final regulations on the provision of investment advice by providers and others under the Pension Protection Act of 2006 ("PPA").  The regulations clarify what is required in order to avoid the prohibited transaction inherent in providing advice to participants - when the advice giver may receive a benefit from the advice given (in the form of direct or indirect compensation from the investment funds).  Advice given must be "revenue neutral" or must be given pursuant to a program using current, verifiable investment theories and strategies.  The regulations can be found here.

The DOL has announced that it will re-propose its revisions to the definition of a "fiduciary."  While the Department has reiterated that it's intention to provide the broadest protection to plan sponsors, plan participants and other retirement savers (primarily through IRA's), there has been considerable chatter concerning the original proposed definition, and comments from a variety of sources, including several Congressman, indicating that the expanded definition would render it impossible for advisors to effectively serve the needs of their clients.  The DOL's press release can be found here.

The Department of Labor has extended the effective date for disclosure of plan fees to plan sponsors/fiduciaries under ERISA §408(b)(2) until April 1, 2012.  The DOL has extended the effective date for disclosure of plan fees to participants until May 31, 2012.  The DOL's announcement can be found here.

We are currently looking for a handful of remaining participants who have balances in a plan about to be terminated.  If you have received a letter or other communication from us identifying you as potentially one of those participants, please contact us as soon as possible to discuss your options.  There is no cost to these participants for our services.

Calamos Investments has published it's February 2011 Retirement Solutions newsletter featuring an article entitled: "Custom Target Date Portfolios:  In Reach for Small to Mid-Sized 401(k) Plans," written by Michael J. Olah.  The article dispels some of the myths used to create barriers to advisors fashioning customized target date funds for small and mid-sized clients.  Don't hesitate to ask you Calamos representative for a copy, or give us a call to discuss the topic and issues.

The DOL has announced it's intention to extend the initial compliance date for the regulations issued under ERISA §408(b)(2).  The regulations, issued in "interim final form" on July 16, 2010 and to be effective one year later requires vendors and service providers to disclose, and plan fiduciaries to receive, certain information concerning the receipt of direct and indirect compensation or other fees.  The new compliance date is expected to be Januray 1, 2012.  The DOL's announcement is here.  See below for links to the regs and the DOL's fact sheet.

The Investment Company Institute (ICI) has put together a discussion of the The Economics of 401(k) Plans.  A PDF is available here.

The Wall Street Journal published an article on using collective trusts in 401(k) plans.  The article can be found here.

The Department of Labor has (finally) issued regulations under ERISA §408(b)(2).  Our Email Alert of the regs is here.  The text of the regs can be found here. and the DOL's Fact Sheet is here.

We've developed a Fiduciary Training course designed to make fiduciaries aware of the role, responsibilities, and best practices.  Check out the "Products" tab for more information, or give us a call at (330) 961-2082, or email us at info@erisa-expert.com.

We've published Building an Investment Committee for Effective and Efficient Decision Making, a "white-paper" treatment of issues concerning the formation and function of a retirement plan investment decision committee.  The white-paper discusses ERISA fiduciary standards for the committee and its members, who should be on the committee, what decisions should be within the province of the committee, and how much documentation the committee should maintain.  A copy of the white-paper can be obtained here.

News

A recent AARP study concluded that many plan sponsors haven't adopted automatic enrollment features as a result of the perceptions that employees wouldn't like it (30% of respondents) or they were concerned about potential cost implications (20%).  AARP's summary of the results can be found on their website, (where you can find a complete copy of the study report), and a copy of the executive summary can be found here.

On June 10, 2010, the DOL issued new regulations (replacing temporary regs issued in 2007) clarifying issues surrounding the timing of QDRO issuance.  The new regs can be found on the Articles/Resources page or directly here.

There are a couple of new questions answered under the "Articles/Resources" tab, describing the IRS' effort to survey the "health" of a cross section of 401(k) plans, and compliance "trends."  The Q&A can be accessed here.

On May 19th, 2010, the IRS issued final regulations concerning the diversification requirements for company stock and other securities mandated by Code Section 401(a)(35).  A copy of the final regulations can be found here.  Our analysis of the regulations will appear shortly, although we expect the new regulations will have little impact on plan sponsors offering company stock as an investment option as most have already implemented diversification features.

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Recent Media Coverage of Michael J. Olah & Associates, LLC

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Copyright © 2013 Michael J. Olah & Associates, LLC
Last modified: 10/17/13

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