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Ret plan investments - misc

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Prohibited Transactions for Fiduciaries After DOL Rule Change
"One viable recommendation for reducing legal risk is to adopt a third-party verification system. A third-party verification (TPV) service would allow plan providers to ensure a customer understands the recommendation for a rollover or change in investment. This includes understanding the fees and costs associated with a financial transaction, compensation for the advisor, benefits, and risk of the investment, and the reasons for making the transaction. A TPV could also provide documentation of the client's understanding should litigation arise." (Butterfield Schechter LLP)
SEC Chairman Promises Action on Fiduciary Rule
"SEC Chairman Jay Clayton pledged to move forward on the fiduciary rule in a 'coordinated' process with the [DOL].... The SEC and Labor Department must work together on 'the very complicated issue' of the rule, he said.... 'What's happening at the [DOL] is going to affect the markets we regulate, and vice versa.' " (Financial Planning)
Elements of an Investment Policy Statement
"Intention to comply with ERISA section 404(c) ... Eligible investments ... Prohibited investments ... Roles and responsibilities ... Investment option selection criteria ... Investment option monitoring process ... Investment option replacement criteria." (Lawton Retirement Plan Consultants)
Most Nevada Financial Planners Become Fiduciaries Per State Law on July 1
"On July 1, 2017, nearly all of those providing financial planning services, or holding out as financial planners, to clients located in Nevada, or those investment advisers and registered representatives who are located in Nevada, become subject to fiduciary duties as defined by Nevada state law.... The Nevada law also authorizes the Administrator of Securities 'to adopt regulations defining or excluding acts, practices or courses of business as violations of that fiduciary duty and prescribing means to prevent violations of that fiduciary duty.' ... The rule making by the Administrator of Securities will be crucial in order to preserve a bona fide fiduciary standard upon financial planners in Nevada." (Ron A. Rhoades, JD, CFP)
LPL Bars Brokers from 401(k) Rollover Advice
"LPL Financial's hybrid advisors will no longer be able to make 401(k) rollover recommendations when acting as brokers, InvestmentNews reports. The move will expose advisors and LPL to less risk under the [DOL's] fiduciary rule, which treats rollover recommendations as fiduciary advice and went into partial effect June 9, according to the publication. LPL's hybrid advisors will still be able to recommend rollovers if that advice is limited to their company's advice side of the business and meets certain conditions, according to an internal memo seen by InvestmentNews." (Financial Advisor IQ)
What Every Investment Committee Member Needs to Know
"Fiduciary responsibility -- what does it mean to do the right thing? ... How to construct a successful investment committee ... Diverse committees achieve better decisions than less diversified ones ... Focus on what you can control -- the investing fundamentals." (Vanguard)
Time to Reduce Your Pension Plan Risk?
"With the impending change in corporate tax policy, it is important to consider how funding up the pension plan now, under the current tax structure, may be financially advantageous to your organization. Additional funding may then put you in a good position to take action with one or more of [these] 'de-risking' options ... Allow lump sum payments from the pension plan when individuals terminate employment ... Use a Liability Driven Investment (LDI) asset management approach ... Transfer longevity risk via use of insurance company products ... Plan termination." (Watkins Ross)
Financial Communications and Asset Allocation Decisions
"Communication media and format have large effects on reading style, which can affect comprehension. Print encourages a more systematic, deeper reading style compared to an online format. Charts attract visual attention. Comprehension and individual differences (especially risk tolerance and financial self-confidence) have large effects on asset mix decisions." (TIAA Institute)
Putting the Pension Back in 401(k) Plans
"[Lifetime Income Annuities (LIAs)] are most beneficial to plan participants who optimally commit 8% to 15% of their plan balances at age 65 to an LIA that starts payments at age 85. Plan sponsors can integrate LIAs as defaults in their plans by converting as little as 10% to 15% of retiree plan assets." (TIAA Institute)
Removing the Legal Impediments to Offering Lifetime Annuities in Retirement Plans
"Longevity risk ... is the greatest risk facing retirees in the U.S. today. Government policies could require plan sponsors to include lifetime income products in their investment options or provide tax incentives that encourage their use. To broaden the range of permissible lifetime income products, the federal government could allow low-cost products that pool risk among participants." (TIAA Institute)
Target Date Funds, Annuitization and Retirement
"Financial/portfolio risks and mortality risks are independent and separable, so holdings including annuities can capture both completely. The target-date funds framework without annuities does not allow someone with a limited bequest motive to insure idiosyncratic mortality risk. The study's results support the use of target-date fund products within annuitized vehicles." (TIAA Institute)
[Opinion] ARA Letter to EBSA Requesting Interpretative Guidance Under ERISA Section 408(b)(2) (PDF)
"ARA recommends that [the] Department issue interpretative, sub-regulatory guidance that recognizes ... the associated uncertainty as to the final parameters of the Rule and related exemptions, and the potential for confusion by plan sponsors, are extraordinary circumstances beyond the control of covered service providers which would preclude the immediate distribution of an updated 408(b)(2) notice ... ARA further recommends that the Department's guidance indicate that as a result of these extraordinary circumstances, a covered service provider who provides an updated 408(b)(2) notice no later than the first calendar quarter of 2018 will be deemed to have provided the notice as soon as practicable[.]" (American Retirement Association [ARA])
Impact of the DOL Fiduciary Rule on Independent Insurance Agents
"[S]uggesting that an investor take money out of his IRA to purchase a life insurance policy would be fiduciary advice.... [The prudence requirement] does not require agents to guarantee a future outcome. But it does require agents to go through a thorough and well-documented series of steps.... The 'impartial conduct standards' require that the agent act in the best interest of the client and not make misleading statements in any information provided to the client." (Drinker Biddle)
[Opinion] GE Botches Its Pension Math?
"Is the solution to GE's pension woes more hedge funds and more private equity funds? ... [M]ore alternative investments won't cure America's growing pension crisis.... [T]he time has come to enhance Social Security to adopt a similar model to what we have in Canada with CPP assets being managed by the CPPIB. In order to to do this properly, they need to get the governance right." (Pension Pulse)
Retirement Assets Total $26.1 Trillion in First Quarter 2017
"Assets in [IRAs] totaled $8.2 trillion at the end of the first quarter of 2017, an increase of 4.1 percent from the end of the fourth quarter of 2016. [DC] plan assets were $7.3 trillion at the end of the first quarter, up 3.7 percent from year-end 2016. Government [DB] plans ... held $5.5 trillion in assets as of the end of March, a 2.1 percent increase from the end of December. Private-sector DB plans held $3.0 trillion in assets at the end of the first quarter of 2017, and annuity reserves outside of retirement accounts accounted for another $2.1 trillion." (Investment Company Institute [ICI])
Making ESG a Part of Your DC Plans: Sustainability Could Help Plan Participants Reach Their Goals (PDF)
"[Environmental, social, and corporate governance (ESG)] options in a DC plan could make plan participants more successful investors by getting them to contribute earlier or contribute more to their retirement plan.... Just as they do as consumers, plan participants may also want to express their values through their investments and receive the emotional benefits they get from feeling like they are doing something good and impactful with their money.... Rather than discourage normal behavior, therefore, DC plans should encourage it by adding ESG options to their lineups." (Morningstar)
The Search for a Long Term Investment Premium
16 pages. "[This paper identifies] eight building blocks of value creation via long-horizon investing.... [A]smaller asset owner focusing its long-horizon efforts on avoiding costs and mistakes can see an increase in investment returns of about 0.5% a year. A larger fund with the governance and financial resources to consider all available options for capturing premia could see a net uplift to returns of around 1.5% a year." (Willis Towers Watson)
Task Force Develops Small Plan RFP Template
"[A] special joint NAPA/CIkR task force has developed a template designed to make it easier to obtain a consistent, apples-to-apples comparison of service features from 401(k) recordkeepers.... The NAPA Recordkeeping Platform Assessment Template deals with three key service aspects: [1] Administration Fee Detail (including per-participant, asset-based, and participant and document services); [2] Plan Service Highlights (including data submission, reporting and testing, and call center services); [3] Investment Program Overview (including fund menu requirements, and revenue-sharing methodology)." (American Society of Pension Professionals & Actuaries [ASPPA])
[Discussion] Contribution of Real Property to a DB Plan
"I know that several large companies, such as Anheuser-Busch and Coca Cola, have contributed real property to their pension plans (rather than cash). Have you seen this done by smaller companies as well? Where can I find individual prohibited transaction exemptions so that I can see what criteria the DOL uses in granting an exemption?" (BenefitsLink Message Boards)
Putnam, Fidelity Win 401(k) Lawsuits
"A federal judge shot down plaintiffs' arguments that Putnam breached its fiduciary duty to its own 401(k) plan participants by "stuffing" the plan with Putnam-affiliated investment funds, without regard to cost, performance or other metrics.... The Fidelity lawsuit, Ellis et al. vs. Fidelity Management Trust Co., concerned the firm's alleged mismanagement of a stable value fund. Plaintiffs claimed the fund's low investment returns and high fees made it an imprudent investment for 401(k) plan participants." (Pensions & Investments)
[Opinion] The CFP Board's Thunderbolt Fiduciary Play Should Proceed and Likely Will
"In what may be a giant step forward for investors and the advice business, the Certified Financial Planner Board of Standards is proposing to make its CFP certificants 'fiduciaries at all times.' It may also be death knell of sorts for the suitability standard that allows financial advisors greater latitude in choosing how and when investors' interests get put ahead of their own." (RIABiz)
Target Wealth: The Evolution of Target Date Funds
16 pages. "Based on a model with parameters fitted to historical returns, and also on model independent bootstrap resampling, ... constant proportion strategies give virtually the same results for terminal wealth at the retirement date as target date strategies. This suggests that the vast majority of Target Date Funds are serving investors poorly. However, if we allow the asset allocation strategy to adapt to the current level of the total portfolio value, significantly lower risk of terminal wealth can be achieved, at no cost to its expected value." (Peter Forsyth, Kenneth R. Vetzal, and Graham Westmacott, Via SSRN)
The Quandary of Publicly Traded Employer Stock in a 401(k) Plan (PDF)
"[In] the wake of a series of high-profile employee lawsuits seeking recovery against Enron, Lehman Brothers, and other employers for losses from 401(k) investments in employer stock, such funds can ... seem a recipe for disaster. This article examines the quandary that employer stock funds pose for plan sponsors, who must navigate ERISA's careful balance of [1] ensuring fair and prompt enforcement of employee rights under employer-provided retirement plans while [2] encouraging employer creation of these plans." (McDermott Will & Emery, via Bloomberg BNA Pension & Benefits Daily)
[Discussion] Hiring Company Owner's Step-son as Plan's Financial Advisor
"Husband owns 100% of the company. Wife works at the company and is a co-trustee of the plan. She would like to hire her son from a prior marriage (who has not been adopted by her husband) as the financial advisor for the company's 401(k) plan. Several other unrelated individuals are compnay employees. He would receive commissions and fees, of course. The plan allows participants to self-direct the investment of their accounts. Assuming the commissions and fees are reasonable, is this allowed?" (BenefitsLink Message Boards)
[Discussion] What Information Do You Use to Evaluate Investment Funds?
"When a retirement plan's fiduciary (whether it's the plan's sponsor/administrator, a section 3(38) manager, or a section 3(21) advisor) evaluates investment funds to consider which should be added to or removed from a plan's menu for participant-directed investment, which sources of information should the fiduciary use? Does a fiduciary look at the Beta, R2, Sharpe Ratio, Standard Deviation? How does these measures aid, or distract from, one's analysis? Does the fiduciary use Morningstar? Lipper? Bloomberg? Litman Gregory? Zacks? Zephyr? Others? Which sources do you like, and why?" (BenefitsLink Message Boards)
What Are the Best Funds for Your 401(k) Plan?
"Whether you are considering an off-the-shelf design to keep costs low, or you prefer a more customized plan (that may cost more), you will need to understand the risks and potential benefits associated with the different approaches to investment offerings.... Here are 14 things to consider when considering which investment options are the best 401(k) funds for your plan." (ForUsAll)
States Pushing Fiduciary Rule Standards (With Success)
"Nevada surprised industry insiders by quickly debating and passing Senate Bill 383 revising the Nevada Securities Act to stiffen the fiduciary standard. The bill states that any 'broker-dealer, sales representative, investment advisor or representative of an investment advisor shall not violate the fiduciary duty toward a client' imposed in a separate statute. That separate statute imposes the 'duty of a fiduciary' on all financial planners.... Other states, such as New York and California, are considering fiduciary statutes of their own." (
Considerations for ESG Policy Development (PDF)
"At the highest level, investors with policies considered to be effective and broadly supported share some common traits. They have articulated their purpose, priorities, and principles, and integrated these pillars within their investment policies and decision criteria. One key to arriving at this point is the investment of time. Effective ESG policy creation requires a process of stakeholder engagement that includes education about and exploration of the sustainable investing thesis and opportunity set." [Also available: Sample Language for Integrating the Goals of the Paris Climate Agreement into an Investment Policy Statement.] (Cambridge Associates)
[Guidance Overview] With the Tip of a Hat, a Fund Manager Can Be an ERISA Fiduciary
"[F]und managers [should] consider taking the following actions immediately to limit their potential liability exposure and to evidence their good faith compliance with the final regulation: [1] Revise private placement memorandums and subscription documents to incorporate statements disclaiming the provision of investment advice to benefit plan investors, [2] Adopt universal policies regarding permissible marketing and promotional activities, and [3] Require written representations of independent fiduciaries to satisfy regulatory exemption." (Winstead PC)
Mutual Fund Fees Continue to Decline for 401(k) Plans
"Expense ratios for equity mutual funds in 401(k) plans declined again in 2016, falling to 48 basis points from 51 basis points in 2015 ... This average asset-weighted expense ratio of equity mutual funds in 401(k) plans has fallen almost steadily from the 83 basis points reported in 2003[.]" (Pensions & Investments)
Life Insurance and Annuities: The Impacts of Regulatory Requirements on Consumer Cost and Consumer Choice (PDF)
12 pages. "This issue brief addresses the difference between equality and equity in insurance, and its impact on consumer cost. Then it describes some simple cases involving life insurance and annuities. These cases illustrate basic insurance principles and show that equity can be different from equality. Last, these cases are used to show possible impacts of laws and regulations, or 'mandates,' that: [1] Limit insurers' ability to equitably classify risks on new policies; or [2] Require certain rights or benefits on new policies." (American Academy of Actuaries)
Why Actively Managed Mutual Fund Performance Is About To Improve
"[M]utual funds currently have to report their performance net of commissions and broker compensation. But as broker-dealers shift to being compensated by levelized commissions outside of the funds (even if the consumer still pays a 1% fee via the broker-dealer equivalent to the 1% trail in a C share), the mutual fund itself will no longer have to count the broker's compensation against their own performance!" (Nerd's Eye View)
[Discussion] Defaulted Loan Amounts or Distributed Real Estate -- Countable as an RMD?
"A safe harbor 401(k) plan is terminating. One of the more-than-5-percent owners over age 70-1/2 needs to take his Required Minimum Distribution for 2017. He has an outstanding loan. If he decides to default on the loan, can the outstanding balance be used as part of the RMD? The plan's assets also include real estate. If this same participant wants to take a distribution of the real estate, could its value be used as part of the RMD?" (BenefitsLink Message Boards)
Implementing an Alpha-Beta Liability-Driven Investment Strategy for a Pension Plan
"In assessing the structure of plan liabilities to assets, the client wanted to see if the two could be more closely linked, reducing the variability of the contributions as well as the funded status.... [T]here was essentially no coverage of plan assets to short-term liabilities as well as mismatches in the other segments of liabilities, an aspect that would be addressed in developing the future glide path allocation for the plan.... The mapping strategy reallocated the plan to a series of new investment managers, selecting certain asset categories where index funds were utilized and other categories where active managers were used." (Milliman)
[Guidance Overview] Nevada Imposes Statutory Fiduciary Duty on Broker-Dealers
"A new fiduciary duty will become applicable July 1, 2017, for broker-dealers and investment advisers operating in Nevada ... [Nevada] Senate Bill 383 ... revises the Nevada Securities Act to mandate that any 'broker-dealer, sales representative, investment adviser or representative of an investment adviser shall not violate the fiduciary duty toward a client' imposed ... [by] NRS 628A.010, [which] imposes the 'duty of a fiduciary' on all financial planners. Senate Bill 383 also modifies the definition of 'financial planner' to remove from the exclusion for broker-dealers, their representatives, investment advisers, and their representatives." (Greensfelder)
FX Global Code Warrants a Close Look by Retirement Plan Fiduciaries (PDF)
"Retirement plan fiduciaries, who themselves or through a third party, engage in foreign exchange transactions on behalf of the plan, should be aware of the new FX Global Code.... Though it does not have the force of law, it can serve as a useful springboard for fiduciaries to buttress risk controls and fiduciary awareness over an industry that seems obscure ... The Code may just very well become a benchmark of good practice that one would look for in a fiduciary that is engaging in the FX wholesale market." (Stradley Ronon)
Callan DC Index Up 5% in Q1 2017
"DC plans benefited from strong market performance during the quarter.... While performance for the quarter was strong, the DC Index did markedly lag the average comparable target date fund.... TDFs attracted over 88 cents of every dollar that moved within DC plans. When TDFs are held within a DC plan, they now account for 32% of plan assets." (Callan Associates)
Popular 401(k) Funds Are Packed With Tech Stocks
"Fidelity Contrafund's stake is at a 20-year peak, and other retirement plan favorites are getting close. That's either (a) great, or (b) scary.... In a list of the most popular equity-focused funds in 401(k) plans, by assets, Contrafund ranks third.... It was 36.7 percent tech in the latest monthly data, from April ... That's as high as the monthly measure has been in two decades, and compares with the 20.1 percent in tech for the S&P 500 at the end of April[.]" (Bloomberg)
Thoughts and Questions on the DOL Fiduciary Rule and Its Impacts
"[M]ost of the problems exist when a person tries to wear two hats. In the end, you either represent the manufacturer of a product well (in an arms-length relationship, typically), or you represent the client well (as a fiduciary).... Do the factors you apply in selecting investment products (to implement your strategy) flow from either common sense or do they possess academic support? Are you examining all of the fees and costs of the fund at hand? Are you comparing the product to all others in the marketplace?" (Ron A. Rhoades, JD, CFP)
[Opinion] Why an RIA's Willingness to Get Fired by Clients Is a Mandatory Mindset
"Advisors prove their worth when they make good advice happen bolstered by the implicit, and sometimes explicit, threat that if something's gotta give, it's the advisor's lucrative arrangement with the client. You have two choices: Take my advice or fire me.... It's always been good business yet because of the DOL rule, managed assets under fiduciary care are set to skyrocket. It'll be better for advisors to grow a spine today than explain in court why they didn't later down the road." (RIABiz)
How to Evaluate Your 401(k) Investment Advisor
"You should not continue to work with a 401k investment advisor who will not sign on to your plan as a fiduciary.... Production of reports, investment option performance evaluation, fund searches, Investment Policy Statement (IPS) maintenance and fiduciary compliance consulting are all core investment advisory services. In addition, your 401k investment advisor should be a key player in coordinating your employee education sessions; managing your recordkeeper, trustee, custodian and other providers; benchmarking your plan; helping with plan design issues; and implementing your financial wellness education solution." (Lawton Retirement Plan Consultants)
[Guidance Overview] DOL Fiduciary Rule Goes Into Effect
"With respect to existing Benefit Plan Investors, fund managers may consider sending out a notice or supplement ... to obtain the appropriate representations for reliance on a carve-out.... [F]or self-directed ERISA Plans and IRAs whose owners are not represented by a sophisticated independent fiduciary, any recommendations to such investors will not fall into one of the carve-out categories. Thus, fund managers may want to suspend taking investments (or additional investments) from such investors until further guidance is issued." (Haynes and Boone, LLP)
Interesting Angles on the DOL's Fiduciary Rule, Part 51
"The first step of a best interest, or prudent process, is to determine the information that is 'relevant' to making a decision that is 'informed.' In other words, what would a person who is knowledgeable about such matters, and who is unbiased and loyal to the IRA owner, want to review in order to develop a recommendation? Unfortunately, there aren't any specific guidelines in the fiduciary regulation or BICE." (
Chocolate-Covered Target Date Funds?
"[T]here are many in the financial industry who strongly believe that mixed investing is a bad idea; that mixing a TDF with another investment option is a misuse of TDFs ... [S]ome mixed investors are strategically coupling their TDF with another option that is either slightly more aggressive or slightly more conservative than their TDF.... [As] long as the expense ratios are in line, and the investors are willing and able to manage the rebalancing of their portfolios going forward, their decision to mix may not be wrong for them." (Vanguard)
Washington University Is 15th School Sued Over Retirement Plan
"The lawsuit, filed June 8 in the U.S. District Court for the Eastern District of Missouri, says the university's retirement plan overpaid for administrative and record-keeping services and offered 'historically underperforming' investment options. The lawsuit takes particular aim at the plan's reliance on two companies -- TIAA and Vanguard -- for record-keeping services. The use of multiple record keepers confuses investors and leads to higher fees, the lawsuit claims." (Bloomberg BNA)
The 401(k) Plan Investment Policy Statement
"Seven things to consider including in your investment policy statement: [1] Plan purpose ... [2] Investment objectives/capabilities ... [3] Guidance on monitoring investments ... [4] What assets classes will be included ... [5] Instructions on how to select investments/Approach to performance and measurement ... [6] Establishment of default fund ... [7] Participant education." (ForUsAll)
[Guidance Overview] DOL Fiduciary Rule: June 9 and Beyond
"During the transition period, BIC Advisers ... will only have to comply with the impartial conduct standards to receive relief from the prohibited transaction rules under either the BIC Exemption or BIC Light.... The full BIC Exemption requires a written contract ... for advice provided by BIC Advisers to IRA owners. The contract requirement does not apply to advice for ERISA Plans." (Kilpatrick Townsend)
Fact Sheet for H.R. 2823, the Affordable Retirement Advice for Savers Act (PDF)
"The bill defines 'investment advice' more broadly than DOL's 1975 regulation, expanding the universe of activities that are subject to fiduciary liability. Under the bill, a fiduciary relationship occurs any time an advisor provides one of a broad array of recommendations relating to retirement accounts.... [H.R. 2823] [1] Ensures personalized advice about investments, distributions, or hiring other advisors triggers fiduciary obligations. [2] Requires financial professionals who advise IRAs to act in the best interests of their clients.... [3] Preserves the ability of retirement savers to receive financial education, such as examples of investment alternatives that fit within asset classes." (Committee on Education and the Workforce, U.S. House of Representatives)
Means and Markets Have Aligned: Why You Should Consider De-Risking Now (PDF)
12 pages. "Building a strong defense now may position companies, particularly those in cyclical industries, to better endure the next downturn, allowing them to pursue growth initiatives at a time when their competitors may be cutting back. This environment could be fleeting, however, and [the authors] believe now is the time to prepare for a lower-risk future." (Prudential)
[Opinion] People in States Represented by the Cosponsors of the Choice Act Lose $12.1 Billion Each Year Due to Conflicted Retirement Advice
"Representatives who voted for the CHOICE Act have chosen to side with unscrupulous actors in the financial industry, who have profited handsomely from loopholes that allowed them to fleece retirement savers. [A map and table] show how much retirement savers lose annually in each state as a result of receiving conflicted advice." (Economic Policy Institute)
Defining 'Reasonable Comp' Under the DOL Fiduciary Rule
"The best way for financial advisors to think about 'reasonable compensation' in the fiduciary sense is to imagine a scatter graph. And the best place to be on that graph is the dot in the middle of the pack of other dots.... Consulting firms and benchmarking companies have plenty of data that will help guide advisors stay in the middle of the scatter graph pack." (
DOL Fiduciary Rule Starts to Take Effect Today
"Unless the new fiduciary rule is repealed or replaced, it's critical for 401(k) plan sponsors to take it seriously. They should assess their current relationships and determine the relative risks associated with them in light of the fee provisions that the fiduciary rule addresses. While plan sponsors won't be able to determine the exact nature of their potential liability, they will at least be in a position to take an inventory of their possible exposure." (Society for Human Resource Management [SHRM])
Quantifying the Impartial Conduct Standards Under the DOL Fiduciary Rule
"While the 'misleading statements' standard is self-explanatory, it has been suggested that it will be left to the courts and attorneys to define the meaning of 'best interest' and 'reasonable compensation.' ... [J]ust as the courts look to the Restatement (Third) of Trusts to interpret fiduciary law, advisers and other investment fiduciaries can, and should, look to the Restatement for guidance as the interpretation of both terms." (The Prudent Investment Adviser Rules)
[Guidance Overview] Impact of the DOL Fiduciary Rule on Unregistered Investment Funds
"As a practical matter, fund sponsors marketing to large plans, and IRAs and smaller plans with a professional adviser, will not be impacted by the new Fiduciary Rule by satisfying the [Investment Fund] Exception ... However, fund sponsors that market to IRAs and smaller plans without a professional adviser will need to consider whether they will continue to market to such investors." (Goodwin Procter)
House Passes Bill to Replace Dodd-Frank, Repeal DOL Fiduciary Rule
"Legislation replacing much of the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by the House on [June 8], along party lines by a vote of 233-186. The Financial CHOICE Act makes substantial changes at the [SEC] and other financial regulator ... The bill would also repeal the [DOL's] new fiduciary rule until the SEC produces its own standard[.]" (Pensions & Investments)
House Committee Leaders Move to Overturn Flawed Fiduciary Rule, Strengthen Protections for Retirement Savers
"Rep. Phil Roe (R-TN), member of the House Committee on Education and the Workforce, and Rep. Peter Roskam (R-IL), chairman of the Ways and Means Subcommittee on Tax Policy, today introduced the Affordable Retirement Advice for Savers Act (H.R. 2823). The legislation would protect access to affordable retirement advice by overturning the Obama administration's flawed fiduciary rule while ensuring retirement advisors serve the best interests of their clients." (Committee on Education and the Workforce, U.S. House of Representatives)
Pension Plan De-risking Initiatives
"De-risking techniques can take two approaches: [1] Transfer the liability and risk to a third party, which could be the individual plan participant or an insurance company. [2] Retain the liability as part of the pension plan and apply de-risking techniques to manage overall risk.... With either or both approaches, pension plan de-risking strategies must align with the plan sponsor's long-term objectives, such as helping their plan participants prepare for a financially secure retirement. Most employers, however, manage toward a series of short-term objectives." (Findley Davies | BPS&M)
[Guidance Overview] DOL Fiduciary Rule: Ready, Set, Go! But How Far?
"What conditions apply under the new exemptions on June 9? ... Is the requirement to 'levelize' compensation required under the 'impartial conduct standards'? ... When do the rule and exemptions become applicable? ... What other topics do the FAQs cover? ... What does the nonenforcement policy cover? ... Is the DOL still considering changes to the rule and exemptions?" (Morgan Lewis)
[Discussion] ROBS Promoter Is Fiduciary Under New DOL Rule?
"Under the new DOL Fiduciary Rule, wouldn't a promoter of a ROBS plan (Rollover as Business Start-Up) be a fiduciary? They are being paid a fee to recommend the client move funds from an IRA to a qualified plan for the purpose of purchasing employer stock." (BenefitsLink Message Boards)
'Last Minute' Fiduciary Rule Check-In: What Plans and Arrangements Are Covered
"Some plans are not subject to the Rule, and some arrangements that are not actually IRAs are treated as if they were IRAs and therefore subject to the Rule. So, how are 'plans' and 'IRAs' defined?" (Drinker Biddle)

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