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[Guidance Overview] Charity is Exception to 'Contingent Right', Making Trust a 'Qualified Beneficiary'
"When a trust is named as the beneficiary of an IRA, it must a qualified 'see-through' trust (qualified trust) in order to allow for extended distributions based on the trust beneficiary's life expectancy. Despite best efforts, some trusts fail to meet the requirements to be a qualified trust; and even experts in the field sometimes make incorrect determinations as to the qualified status of a trust." (Appleby Retirement Dictionary)
Unintended Tax Consequences from Mishandling of an Inherited IRA: A Case Study
"Ultimately, retirement account owners will be responsible for paying any income tax due on distributions that they take from their retirement accounts, whether or not those distributions are shared with others.... For those who want to share inherited accounts with others, strategies can be implemented to ensure that any tax burden is also shared." (Appleby Retirement Dictionary)
Why You Should Roll Your 401(k) to Your New Employer
"Many 401(k) plans offer participants access to institutional share class mutual funds and very low cost index funds, especially those sponsored by large employers.... Balances in retirement plans, such as 401(ks), are protected against civil judgments and bankruptcy.... [D]epending on where you live, your state may not extend that protection to IRAs.... Many 401(k) plans permit participants to borrow from their plan assets at a very low rate of interest." (Financial Finesse)
[Guidance Overview] Missed a 60-Day Rollover? Try Self-Certification
"Plan administrators and IRA custodians are not required to accept the self-certification and ... many of the larger institutions [may] continue to insist upon a private letter ruling.... [T]he IRS itself has cautioned that self-certification is not the equivalent of a waiver of the 60-day requirement." (Fox Rothschild LLP)
SEC Provides Free Online Financial Planning Tools
Tools at the SEC's web site include: 401(k) and IRA Minimum Distribution Calculator; Compound Interest Calculator and Savings Goal Calculator; Social Security Retirement Estimator; Retirement Ballpark Estimator; Mutual Fund Analyzer; 529 Expense Analyzer; and a link to a searchable database of investment advisers who have filed Form ADV. (U.S. Securities and Exchange Commission)
Almost Half of Projected IRA Rollover Assets 'At-Risk' Post-DOL Conflict of Interest Rule
"New research ... suggests more assets in the retirement industry will remain in employer-sponsored DC plans following implementation of the rule.... 29% of respondents said they rolled over their retirement savings from an employer-sponsored account into an IRA because of advice from a financial professional. Another 29% consolidated their retirement savings into an existing IRA." (planadviser)
Proposal Would Crack Down on Tax Avoidance in Retirement Plans, Create New Opportunities for Working Americans to Save
"In addition to cracking down on 'mega Roth IRAs,' the draft proposal would: [1] Allow employers to make 'matching' contributions to a 401(k) retirement plan while their employees make student loan repayments.... [2] Eliminate Roth conversions for both IRAs and employer-sponsored plans ... [3] Eliminate 'stretch IRAs' ... [4] Gradually increase the age at which retirement plan participants are required to begin taking distributions from their accounts.... [This] discussion draft ... is being circulated to stakeholders, members of Congress, federal officials and others for review and comment." [Also available: a one-page summary of the legislative proposal, a longer summary; full legislative text, and a Joint Committee on Taxation technical explanation.] (Committee on Finance, U.S. Senate)
Ten Important Facts About IRAs (PDF)
14 pages. "[1] IRAs are the largest pool of assets in the U.S. retirement market.... [2] The incidence of IRA ownership increases with age.... [3] IRAs are predominantly held by moderate-income households.... [4] IRA balances tend to rise with length of ownership.... [5] Equity holdings figure prominently in traditional IRA investments.... [6] Although few traditional IRA investors make contributions, those who do display persistence.... [7] Rollovers from employer-sponsored retirement plans have fueled growth in IRAs.... [8] A large majority of individuals consult a financial professional when rolling over assets to a traditional IRA from a former employer's retirement plan.... [9] Most IRA owners consult a financial professional when creating a retirement strategy.... [10] IRA withdrawals are infrequent and mostly retirement related[.]" (Investment Company Institute [ICI])
[Guidance Overview] IRS Allows 'Self-Service' 60-Day Rollover Waivers for Retirement Plan Distributions (PDF)
"If an indirect rollover does not occur within the required 60-day timeframe, IRS will now allow the affected individual to self-certify that they meet a 'hardship waiver' exception to the 60-day rule in a broad array of circumstances. Plan administrators and IRA trustees can then rely on the self-certification in deciding whether to accept a rollover contribution after the 60-day period ends." (Xerox HR Services)
Interesting Angles on the DOL's Fiduciary Rule, Part 17
"While there could be a number of ways of satisfying the requirements, ... one way -- and probably a good way -- is to have procedures, forms and services for gathering and evaluating the information and for documenting why the analysis of that information results in a recommendation that the transfer (or not transferring) is in the best interest of the IRA owner. Also, while BICE does not specifically discuss the analysis that needs to be made if the adviser will not be providing 'Level Fee Fiduciary' advice to the IRA, the logical conclusion would be that the requirements are the same[.]" (
[Official Guidance] Text of IRS Ann. 2016-30: Relief for Victims of Louisiana Storms (PDF)
"This announcement provides relief to taxpayers who have been adversely affected by the recent storms and flooding in Louisiana that began August 11, 2016, (Louisiana Storms) and who have retirement assets in qualified employer plans that they would like to use to alleviate hardships caused by the Louisiana Storms. In addition, this announcement provides relief from certain verification procedures that may be required under retirement plans with respect to loans and hardship distributions.... The parishes included in the covered disaster area for the Louisiana Storms are identified in the News Release issued by the IRS for victims of the storms and flooding in Louisiana ... Plan administrators may rely upon representations from the employee or former employee as to the need for and amount of a hardship distribution, unless the plan administrator has actual knowledge to the contrary, and the distribution is treated as a hardship distribution for all purposes under the Code and regulations." (Internal Revenue Service [IRS])
[Guidance Overview] Text of IRS IR-2016-115: Retirement Plans Can Make Loans, Hardship Distributions to Louisiana Flood Victims (PDF)
"Participants in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures." (Internal Revenue Service [IRS])
[Guidance Overview] Retirement Plan Rollover Rules Relaxed: The 'I Lost It' Excuse May Actually Work
"An automatic waiver is of limited application as it only applies in a direct rollover scenario where the new plan or financial institution receives the funds before the end of the 60-day rollover period but fails to deposit them into a plan or IRA within the 60-day period due to no error of the participant. In this situation, the funds must actually be deposited into the plan or IRA within one year from the beginning of the 60-day rollover period.... Apparently appreciating the commonplace issues that arise with rollovers and seeking to avoid unintended 'leakage' of retirement plan assets from retirement vehicles for those that do not have the time or financial resources to pursue a PLR ... [Rev. Proc. 2016-47] provides taxpayers with a new mechanism to facilitate a rollover, even if a technical failure to comply with the 60-day rule has occurred." (Michael Best & Friedrich LLP)
2014 Update of the EBRI IRA Database: IRA Balances, Contributions, Rollovers, Withdrawals, and Asset Allocation (PDF)
"The average IRA account balance in the database was slightly more than $100,000 and the average IRA individual balance was $127,583, but the balances varied significantly by the IRA type: Roth IRAs had the lowest average balance, while Traditional IRAs had the highest average balance.... Roth IRAs were more likely to receive a contribution than Traditional IRAs (25.9 percent vs. 6.4 percent).... Almost 24 percent of individuals owning a Traditional or Roth IRA took a withdrawal in 2014, including 27.2 percent of Traditional IRA owners." (Employee Benefit Research Institute [EBRI])
[Guidance Overview] IRS Releases Self-Certification Procedure for Late IRA Rollovers
"In many cases, taxpayers should consider using a direct rollover from an employer plan or trustee-to-trustee transfer from an IRA to avoid any chance for missing the 60-day rollover window and to avoid withholding on the distribution. In addition, taxpayers should note that self-certification is not an automatic waiver of the 60-day window from the IRS; the issue may still be adjusted upon an IRS audit if the IRS finds incorrect information or disagrees with the facts supplied in the self-certification statement." (RSM US)
[Guidance Overview] IRS Finds Charity Is Exception to 'Contingent Right', Making Trust a 'Qualified Beneficiary'
"When there are multiple beneficiaries of a trust, the beneficiary with the shortest life expectancy is used for purposes of calculating RMDs. Only a primary or contingent beneficiary is considered ... In [a recent Private Letter Ruling], the IRS determined that [the named] charitable organizations fall under that exception, because they could become beneficiaries only if all the other beneficiaries in the other classes died before the assets were fully distributed. As such, the charitable organizations ... are 'mere successor beneficiaries'[.]" (Appleby Retirement Dictionary)
[Guidance Overview] IRS Allows Self-Certification for Late Rollovers of Retirement Plan Funds
"To qualify for this relief, the IRS cannot have previously denied relief to the taxpayer for that rollover, and the taxpayer must have missed the 60-day deadline for one of [11 specified reasons] ... According to the IRS, the taxpayer's self-certification is not a waiver of the 60-day requirement because the IRS can still deny the waiver on audit if it determines the taxpayer did not meet the requirements." (Journal of Accountancy)
[Official Guidance] Text of IRS Rev. Proc. 2016-47: Waiver of 60-Day Rollover Requirement (PDF)
"This revenue procedure provides guidance concerning waivers of the 60-day rollover requirement contained in sections 402(c)(3) and 408(d)(3) of the Internal Revenue Code. Specifically, it provides for a self-certification procedure (subject to verification on audit) that may be used by a taxpayer claiming eligibility for a waiver under Sections 402(c)(3)(B) or 408(d)(3)(I) with respect to a rollover into a plan or individual retirement arrangement (IRA). It provides that a plan administrator, or an IRA trustee, custodian, or issuer ... may rely on the certification in accepting and reporting receipt of a rollover contribution. It also modifies Rev. Proc. 2003-16 ... by providing that the [IRS] may grant a waiver during an examination of the taxpayer's income tax return. An appendix contains a model letter that may be used for self-certification." (Internal Revenue Service [IRS])
[Guidance Overview] Text of IRS News Release: New Procedure Helps People Making IRA and Retirement Plan Rollovers (PDF)
"Normally, an eligible distribution from an IRA or workplace retirement plan can only qualify for tax-free rollover treatment if it is contributed to another IRA or workplace plan by the 60th day after it was received. In most cases, taxpayers who fail to meet the time limit could only obtain a waiver by requesting a private letter ruling from the IRS. A taxpayer who missed the time limit will now ordinarily qualify for a waiver if one or more of 11 circumstances, listed in the revenue procedure, apply to them." (Internal Revenue Service [IRS])
Uber Drivers Aren't Employees, But They Have a Retirement Plan
"They may not have a 401(k) plan, but drivers working through Uber Technologies Inc.'s platform will soon be able to open a retirement account right in the app.... While fighting a pitched court battle to prevent drivers from being classified as employees, Uber has simultaneously joined forces with Betterment LLC ... to offer them IRAs.... [T]he option will be fee-free for the first year." (Bloomberg)
Why You Should Do An IRA Rollover When You Leave Your Job
"If you keep your money in an old employer's 401(k) plan, you will continue to be limited to the 10 to 15 funds it has selected for you. These funds may not be top-performing funds, and they may have higher-than-average fees.... In many 401(k) plans, roughly half of the options available are target-date funds, which can come with extra fees." (NerdWallet, via Nasdaq)
Advisors Cry Foul Over State Mandated Auto-IRAs
"In some states, the government is positioned to play the role of financial advisor within state administered auto-IRA programs and it's not just trade associations that are concerned. Financial advisors question what a state run automatic-IRA retirement plan might turn into in the long run." (
Qualified Charitable Distributions Can Ease the Tax Pain of RMDs
"Non-itemizers will get a tax benefit of reduced AGI from a donation that they otherwise wouldn't deduct. Itemizers will forgo the charitable deduction but may benefit from a lower AGI; QCDs might reduce the bite of the itemized deduction phase-out for high-income clients[.]" (On Wall Street)
DOL's Fiduciary Rule Poses New Litigation Threat to IRA Advice
"[P]laintiffs' lawyers and the courts have acknowledged that seemingly small differentials between share classes can have a meaningful impact on prospective-retirees' savings. The lesson to fiduciaries is that no fiduciary decision is insignificant and decisions should be reevaluated regularly as the clients' needs change.... Applying general best practices isn't enough -- advisors must have a holistic approach and take a look at their client's unique circumstances to determine any particular or customized needs." (Manning & Napier)
[Guidance Overview] Interesting Angles on the DOL's Fiduciary Rule, Part 15
"Since a pure level fee, or non-conflicted, adviser won't commit a prohibited transaction and therefore won't need an exemption, that adviser will not be bound by the best interest standard for investment advice to individual IRAs. Instead, the adviser will only be subject to the conduct standards in the securities laws.... The biggest [exception] is a recommendation to a plan participant to take a distribution and roll over to an IRA with the adviser." (
Rolling Over a 401(k) Distribution Has Potential Pitfalls
"If you can leave your money in the 401(k), it might make sense to do so. For example, your 401(k) plan might have an excellent investment choice that you cannot buy in your IRA. Or, your new employer might have a 401(k) plan with excellent investment choices and options that you will be able to roll your old 401(k) into. However, your IRA might have more flexible distribution and investment options." (Union Leader)
Clear Link Between Traditional IRAs and Rollovers
"Two new reports published by the Investment Company Institute (ICI) demonstrate that withdrawal activity is lower, equity holdings are higher, and investors tend to be younger in Roth [IRAs] than in traditional IRAs.... [At] year-end 2014, 31% of Roth IRA investors were younger than 40, compared with just 15% of traditional IRA investors." (planadviser)
Traditional IRA Investors Activity, 2007-2014 (PDF)
76 pages. "In tax year 2014, 8.9 percent of traditional IRA investors contributed to their traditional IRAs, and nearly half of traditional IRA investors who did so contributed at the legal limit ... Withdrawal activity is rare among younger traditional IRA investors and overall, fewer than one in four traditional IRA investors took withdrawals in 2014.... In 2014, about seven in 10 new traditional IRAs received rollovers." (Investment Company Institute [ICI])
Roth IRA Investors Activity, 2007-2014 (PDF)
88 pages. "In any given year, more than three in 10 Roth IRA investors contribute to their Roth IRAs. On average, in recent years, estimates suggest that about $18 billion of contributions flowed into Roth IRAs per year.... In 2010, more than 5 percent of Roth IRA investors made conversions, up from less than 2 percent in recent prior years. Between 2011 and 2014, Roth conversion activity declined again, to about 2.6 percent ... Four percent of Roth IRA investors took withdrawals in 2014." (Investment Company Institute [ICI])
Exceptions to the Pro Rata Rule for IRA Distributions
"Distributions that are not subject to the pro-rata rule include: [1] Qualified Charitable Distributions (QCDs) ... [2] Qualified HSA Funding Distributions (QHFDs) ... [3] Rollovers to Company Plans ... You can only fund each of these distribution with the taxable part of your IRA." (Slott Report)
[Opinion] Final DOL Fiduciary Rule Is Likely to Spawn More Litigation Against Financial Advisers
"While the extent of the change is obvious, its worth asking whether the change is for the good or not ... [A recent] article on rollovers certainly describes a process that is more labor intensive, more transparent and puts more legal risk on the adviser involved in the process: however, whether that means better outcomes for consumers is the question, one that is at the heart of the dispute between the financial industry and the [DOL]." (Stephen Rosenberg, The Wagner Law Group)
[Guidance Overview] Final DOL Fiduciary Rule: Higher Bar for Investment Advisors (PDF)
"The final rule identifies some examples of communications that are recommendations, such as recommendations to switch from a commission-based account to an advisory fee based account. The final rule also provides examples of communications that are not recommendations, such as guidelines and other information on proxy voting policies provided to a class of investors, without regard to individual investment interests or policies." (Anderson, Helgen, Davis & Cefalu, PA)
Are Rollover IRAs on the Way Out?
"Keeping more assets in the plan does have its advantages. However, [there are] several important issues related to the stay-over strategy. These include increased costs and fiduciary responsibilities to the plan sponsor for keeping former employees in the plan, as well as additional administrative time and costs.... [P]lan sponsors will need to maintain close contact with retirees still in the plan, keeping on top of address changes, monitoring death notices, and communicating with retirees (or their successors) when making changes to plan provisions or investments. Plan sponsors will also need to establish a process for communicating information conveyed at investment meetings to retirees who are unable to attend." (PenChecks)
You Are Never Too Old to Convert to a Roth IRA
"No matter what your age, you should ask yourself three questions. First, when will the money be needed? Do you need your IRA money immediately for living expenses? If so converting may not be for you. Second, what is your tax rate? If you are retired and your income is lower, that may favor conversion. The third question to ask yourself is whether you have the money to pay the tax on the conversion. It is best to pay the conversion tax from non-IRA funds." (Slott Report)
Banks Strive to Thread DOL Fiduciary Advice Needle in Way That Allows Them to Retain Small Accounts
"A common solution for banks with broker dealer operations is to shift larger clients to the bank's registered investment advisors (RIAs) while offering a robo investment advice solution to smaller accounts that require 'less hand holding' ... Offering only a robo solution will not work for all people with small accounts so banks will need other solutions that provide personal advice[.]" (Mind Over Market)
Who Pays for a Mistake in Your IRA?
"Why are these penalties owed by you, the innocent IRA owner? Because the 'I' in IRA stands for 'individual.' The tax code is structured so that you are totally, 100%, responsible for the correct operation of your IRA.... Employer plan participants may not be at as much risk, but they will be responsible for any amounts distributed to them or that are deemed to be distributed to them." (Slott Report)
Court Finds Debtor's IRA Distribution Is Exempt From Creditors Under Texas Law
"The trustee objected to the debtor's exemption in her IRA, arguing that funds invested in an IRA are only conditionally exempt. According to the trustee, all funds withdrawn from the IRA by the debtor, including the funds withheld for the payment of income taxes, lost their exempt character because of the debtor's failure to use the funds to make a rollover contribution into another exempt retirement account.... Nothing in Section 42.0021(c) requires an account holder to safeguard distributed funds for 60 days or to transfer the funds into another retirement account, the court said.... The exemption doesn't disappear when the account holder receives a distribution, the court said." [In re Moore, No. 15-42046 (Bankr. E.D. Tex. July 6, 2016)] (Bloomberg BNA)
Want to Fund Your HSA with Your IRA? Here's How
"A [Qualified HSA Funding Distribution (QHFD)] is done by direct transfer from your IRA to your HSA. This transaction is not taxable or subject to the 10% early distribution penalty. The amount that can be transferred cannot exceed the amount you are eligible to contribute to your HSA for the year.... The amount you can move will be reduced by any HSA contributions you have already made during the year. You may only do one QHFD in your lifetime. There is an exception to this rule if you start out the year with self-only coverage and then later switch to family coverage." (Slott Report)
How to Take Advantage of a 'Child IRA' Under Current Laws
"The world offers precious few jobs that require only existence, but that newborn baby will have to find them and convince someone to hire him in order to earn the necessary income to start a Child IRA. What kinds of jobs require one to merely sit there and do nothing? Pretty much only one: modeling.... Parents who own businesses and actively advertise represent a special situation. In this situation, maintaining a steady stream of child modeling work may demand less rigor." (Fiduciary News)
Everything You Always Wanted to Know About the Hypothetical 'Child IRA'
"By dialing back the start age to 'new born baby' and investing that $1,000 annual until said baby reaches age 19, we find the value of The Child IRA will have grown to two-and-a-quarter million dollars.... [It] quickly became apparent The Child IRA could easily obviate the need for Social Security.... [Published articles explain how] The Child IRA can become a viable national policy to eventually replace Social Security." (Fiduciary News)
[Official Guidance] Text of PLR 201628006: Required Minimum Distribution Rules Apply to Designated Beneficiary Despite State Court's Post-Mortem Reformation (PDF)
"After Decedent's death, the trustees of the trusts petitioned the Court for a declaratory judgment that would modify the beneficiary designation for IRA X to carry out the original estate plan. Based on its finding of Decedent's intent, the Court ordered that the beneficiaries of IRA X are Trust C as a 50% beneficiary and Trusts D an d E as 25% beneficiaries, consistent with Decedent's prior beneficiary designation. The order was retroactively effective as if such designation were made on the date Decedent signed the beneficiary designation form for IRA X.... [A]lthough the Court order changed the beneficiary of IRA X under State law, the order cannot create a 'designated beneficiary' for purposes of section 401(a)(9)." (Internal Revenue Service [IRS])
[Guidance Overview] DOL Final Investment Advice Regulation's Impact on the Retail Investor Marketplace (PDF)
16 pages. "The purpose of this article is to: [1] provide a summary of the definition of 'investment advice' under the Final Regulation; [2] discuss the impact of the Final Regulation and the prohibited transaction exemptions, particularly the BIC and PTE 84-24, on the distribution of products and services; and [3] provide some recommendations on how to proceed." (Groom Law Group, via The Investment Lawyer)
[Opinion] Conflicted Interpretations Arising from DOL Final Fiduciary Rule
"Was it the DOL's intent to provide incentives for you to apply your AUM fees to a client's cash accounts, so you could comply with the new regs? Do you think the DOL believes you should give up your investment judgment and simply recommend whatever happens to be on the Morningstar list of least expensive options? Don't you think the BICE exemptions were purely and simply an accommodation to product manufacturers who were selling investments that would otherwise be hard to justify as a fiduciary recommendation?" (Bob Veres in Inside Information)
Tips for Drafting Best Interest Contracts Under DOL Rule (PDF)
"In the BIC contract or in a separate single written disclosure provided with the contract, the [financial institution (FI)] must clearly and prominently make certain disclosures. The content of the disclosures will be subject to customization to the FI's particular circumstances. As they apply to IRAs, a few of the disclosures are redundant to other contract terms. So long as the required information is provided clearly and prominently, a single disclosure of particular information is sufficient." (Sutherland Asbill & Brennan LLP)
Planning Opportunities for Non-Spouse Beneficiaries of Inherited Retirement Accounts
"[T]he rules permitting a transfer from an inherited employer retirement plan to an inherited IRA also allow the assets to be shifted to an inherited Roth IRA, effectively giving the beneficiary the option of doing a Roth conversion even after the death of the original account owner. This is a strategy uniquely available to beneficiaries of inherited employer retirement plans, as an inherited IRA may not be converted to a Roth. The caveat, however, is that ... since an inherited Roth IRA (after conversion) still has required minimum distribution obligations, it will usually be preferable to convert any other type of pre-tax retirement account first!" (Michael Kitces in Nerd's Eye View)
[Guidance Overview] Interesting Angles on the DOL's Fiduciary Rule, Part 11
"While the concept of reasonable compensation is old-hat for advisers and service providers to ERISA qualified retirement plans, it has not, by and large, been used in the IRA world.... The DOL explained the concept in a preamble ... 'reasonableness' is defined by free market practices ... in a market where the costs and compensation are transparent and, therefore, where the market is truly competitive.... Benchmarking is on its way to IRAs." (
Retirement Assets Total $24.1 Trillion in First Quarter 2016
"Assets in [IRAs] totaled $7.4 trillion at the end of the first quarter of 2016, an increase of 1.0 percent from the end of the fourth quarter of 2015. [DC] plan assets rose 1.7 percent in the first quarter of 2016 to $6.8 trillion. Government [DB] plans -- including federal, state, and local government plans -- held $5.1 trillion in assets as of the end of March, a 0.8 percent decrease from the end of December. Private-sector DB plans held $2.8 trillion in assets at the end of the first quarter of 2016, and annuity reserves outside of retirement accounts accounted for another $2.0 trillion." (Investment Company Institute [ICI])
[Guidance Overview] The New Fiduciary Regs: A Practical Review, Part 2 (PDF)
"It is clear from the Preamble to the exemption, as well as the exemption terms themselves, that the DOL is trying to structure an environment where the participant remains protected and the advisor acts in the participant's best interests. The DOL approaches this in two ways: on the one hand, forcing the fiduciary to behave within constraints, and on the other, giving a disappointed participant access to litigation as an enforcement mechanism." [Also see Supplement: Best Interest Contract Exemption.] (Ferenczy Benefits Law Center LLP)
[Guidance Overview] The Cold Comfort of the Best Interest Contract Exemption
10 pages. "[T]he BIC Exemption comes at a steep price, imposing extensive compliance costs in the form of new disclosure requirements, as well as new policies and procedures requirements ... The exemption also substantially increases litigation risk by providing IRA and other retirement plan investors ... a new private enforcement right against financial advisers." (Latham & Watkins)
[Guidance Overview] DOL Issues Final Investment Advice Fiduciary Rules (PDF)
16 pages. "Sponsors and fiduciaries of ERISA-governed plans who wish to retain an investment advice fiduciary to advise participants ... need to carefully review the agreements under which those services will be performed to determine if the compensation arrangements or other potential conflicts of interest require reliance on the 'best interest contract' exemption. If so, then the plan fiduciaries would need to determine if the contract or other disclosures provided by the fiduciary meet the requirements of the exemption and to monitor the investment adviser's compliance with the exemption going forward." (Pillsbury Winthrop Shaw Pittman LLP)
Interesting Angles on the DOL's Fiduciary Rule, Part 10
"FINRA issued its Regulatory Notice 13-45 in late 2013. As that notice explained, distribution recommendations are investment recommendations (and thus, in the case of FINRA, are subject to the suitability standard), but distribution education is not an investment recommendation.... [M]any RIA firms and broker-dealers adopted a distributions education approach using 13-45 as the model. While the DOL agrees that distribution education is not a fiduciary recommendation, it does not agree that 13-45 is a safe harbor:" (
[Opinion] The Impact of the New Fiduciary Rule on Investors
"[It's] a big retooling for ... been insurance companies, broker-dealers, who now have this different standard to which they are going to be held.... [We're] frankly in a little bit of an awkward regulatory environment because [an investor] could actually work with an advisor who has different regulatory requirements about how good the advice has to be for my IRA account versus my taxable brokerage account, at the same firm with the same advisor.... [That's not] tenable in the long run." (Morningstar)
[Guidance Overview] What Does the DOL Fiduciary Regulatory Package Really Mean for Advisors?
11 pages. "[F]iduciary status does not apply retroactively, so what will that mean for your existing business? ... [D]istribution model structures for making investment recommendations to small-plan sponsors can take on a variety of new forms. What should you consider? ... [W]hat's a reasonable fee? How to best work with other fiduciaries, wholesalers and service providers ...[W]hat should you consider when making investment recommendations?" (Groom Law Group, for Principal Financial Group)
Under New Fiduciary Rule, DOL Has Reason to Pay Attention to Reverse Churning
"[The DOL's] 1,000-plus page fiduciary rule makes only one obscure reference to 'reverse churning.' ... The SEC and Finra have had this regulatory matter on their radar for years.... In a nutshell, reverse churning occurs when an adviser places client assets in an advisory account, charges an ongoing management fee, and gets paid for doing little or nothing thereafter." (InvestmentNews)
Fiduciary Rule's Impact on IRAs Should Be No Surprise (PDF)
"Both ERISA-governed plans and IRAs have been governed by the same fiduciary investment advice for decades. Considering the DOL has since been given rulemaking authority over Code section 4975, it should come as no surprise that IRAs are subject to the same recently issued final rule that also applies to ERISA governed employer retirement plans." (Ascensus)
[Guidance Overview] How to Comply With DOL's Best Interest Standard of Care
"[M]any advisors don't understand how the best interest standard of care will impact their advice to IRAs ... [T]he best interest standard of care duties [can be divided] into two categories: macro and micro. The macro requirement is that the investment products be generally prudent for retirement investors. The micro requirement is that the recommended combination of investment products and services be prudent for the particular retirement investor." (Fred Reish, in ThinkAdvisor)
Rules to Do an IRA Qualified Charitable Distribution
"[O]btaining the tax benefits for doing a QCD from an IRA to a charity requires meeting very specific requirements, including a minimum age limitation, a maximum dollar amount limitation, and contributing to only certain types of eligible (public) charities ... In addition, there is the most stringent requirement -- though also the easiest to satisfy -- that for an IRA distribution to qualify as a QCD, the check cannot be made payable to the IRA owner and instead must be made payable directly to the charitable entity[.]" (Michael Kitces in Nerd's Eye View)
[Opinion] State-Sponsored Retirement Programs for Small Business Employees: Is Government Action Wise?
"Some of the states that are setting up retirement programs for private company workers have a poor track record as evidenced by underfunded pension plans for municipal staff.... It's not clear ... that individuals will have a better level of consumer protection by being part of a state-run program versus setting up an IRA account directly with a reputable financial institution." (Pension Risk Matters)
Third Legal Challenge to DOL Fiduciary Regulation Filed
"ACLI and NAIFA support responsible and balanced regulations that protect the interests of retirement consumers. But the regulation is neither reasonable nor balanced. It has become clear that it will harm the very people it is meant to help. It will harm retirement savers who now, more than ever, need access to the guaranteed lifetime income products -- personal pensions -- offered by ACLI and NAIFA members[.]" [ACLI, NAIFA et al. v. Perez, No. 16-cv-1530 (N.D. Tex. filed June 8, 2016)] (American Council of Life Insurers [ACLI])
Retirement Health Care Costs and Income Replacement Ratios (PDF)
10 pages. "[C]urrent [income replacement ratios], which do not include unexpected out-of-pocket medical expenses, accurate health care inflation rates, life expectancy projections, and Medicare means-testing surcharges, will likely fail to produce sufficient income for retirees to afford quality health care and maintain the standard of living they have planned for.... [W]hile the health care savings gap will be substantial, it can be managed through modest additional contributions to 401(k) plans, HSAs, Roths, annuities, or other products, such as life insurance." (HealthView)

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