Public Sector Fiduciaries and Their Responsibilities

Fiduciaries are responsible for the management of employee retirement plans in many regards, including plan investments and plan administration.  As such, fiduciaries have responsibilities to both their participants as well as their employers, to hold to the fiduciary standards in all aspects of their work. What are fiduciary responsibilities? Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf … Continue reading Public Sector Fiduciaries and Their Responsibilities

Are Your Participants Experiencing a Fee Imbalance?

Subsequent to the 2012 implementation of ERISA fee reporting regulations (ERISA 408(b)(2) & 404(a)(5)), the Department of Labor (DOL) began to consider the appropriateness of the allocation of plan fees among participants. This is a subject that generally had not been on the radar screen of many plan fiduciaries, but once identified, tends to generate considerable traction due to its obvious validity. Ironically, advisors’ diligent … Continue reading Are Your Participants Experiencing a Fee Imbalance?

Partial Plan Terminations—Do You Have One?

What constitutes a partial plan termination? There is a rebuttable presumption that a partial termination has occurred if 20 percent or more of the participants are involuntarily terminated. The calculation is done as follows:What constitutes a partial plan termination? There is a rebuttable presumption that a partial termination has occurred if 20 percent or more of the participants are involuntarily terminated. The calculation is done as follows: … Continue reading Partial Plan Terminations—Do You Have One?

Principal’s Stable Value Product Called Out in Lawsuit – Rozo v. Principal Life

A lawsuit filed against Principal Financial concerning its traditional stable value product alleges that Principal serves as a plan fiduciary with respect to this product and violated its fiduciary duties by charging excessive fees. This case appears to have legs as it was recently certified as a class action on behalf of 41,000 investors. Stable value products are unique to retirement plans. Principal’s product is … Continue reading Principal’s Stable Value Product Called Out in Lawsuit – Rozo v. Principal Life

Complying With ERISA 404(c)

According to ERISA, plans intending to comply with 404(c) must provide that participants: Have the opportunity to choose from a broad range of investment alternatives (which are adequately diversified); may direct the investment of their accounts with a frequency which is appropriate; and can obtain sufficient information to make informed investment decisions. The plan sponsor must provide annual written notification to participants with its intent … Continue reading Complying With ERISA 404(c)

Fiduciary Liability Insurance

Plan sponsors are often concerned with the prudence and process of obtaining insurance covering ERISA retirement plan fiduciaries. While fiduciary insurance is an important aspect in mitigating the financial impact of fiduciary litigation, there are a number of additional, important activities that are prudent for fiduciaries to embrace. ERISA fiduciaries are well advised to follow a comprehensive strategy to optimize fiduciary risk mitigation. Other important … Continue reading Fiduciary Liability Insurance

Allowable Plan Expenses: Can the Plan Pay?

The payment of expenses by an ERISA plan (401(k), defined benefit plan, money purchase plan, etc.) out of plan assets is subject to ERISA’s fiduciary rules. The “exclusive benefit rule” requires a plan’s assets be used exclusively for providing benefits. ERISA also imposes upon fiduciaries the duty to defray reasonable expenses of plan administration. General principles of allowable expenses include the following: The expenses must … Continue reading Allowable Plan Expenses: Can the Plan Pay?

ERISA Update

At a recent Western Pension Benefit Council/ASPPA Conference the new Fiduciary Rule was reviewed. The new Fiduciary Rule (definition) has come under significant criticism by many industry groups and Congress, some of whom brought litigation to redefine and suspend the effect of this regulation. To date, the DOL shows no intent to revise their position substantially. They indicate that the new rule is structured solely … Continue reading ERISA Update

Allowable Plan Expenses: Can the Plan Pay?

The payment of expenses by an ERISA plan (401(k), defined benefit plan, money purchase plan, etc.) out of plan assets is subject to ERISA’s fiduciary rules. The “exclusive benefit rule” requires a plan’s assets be used exclusively for providing benefits. ERISA also imposes upon fiduciaries the duty to defray reasonable expenses of plan administration. General principles of allowable expenses include the following: The expenses must … Continue reading Allowable Plan Expenses: Can the Plan Pay?

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“Non-Qualified” Success 401(k) Advisors Overlook

Retirement plan advisors can often miss opportunities to meet client needs, add revenue, and tighten relationships that are literally staring them in the face. While intent on designing and managing retirement plans for the benefit of plan sponsor clients and their workforce, 401(k) specialists may neglect the opportunity to help business owners and key executives in meeting their own personal retirement plan objectives and creating … Continue reading “Non-Qualified” Success 401(k) Advisors Overlook