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Webcasts and Conferences
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Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.
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[Guidance Overview]
DOL Proposes Amendment to Service Provider Fee Disclosure Regulation
"A significant concern about the current proposal is whether it would require repapering all of the prior disclosures. However, it is unclear from the proposal whether, once finalized, the rule would require that covered service providers furnish the guide to existing plan clients or only when entering into new arrangements for services. Even if service providers are not required to furnish existing clients with a guide right away, they may be required to provide one to existing clients under the annual update requirement."
(Morgan Lewis)
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[Guidance Overview]
DOL Proposed Regs Require a Guide to 408(b)(2) Covered Service Provider Fee Disclosure (PDF)
"Given that comments are being accepted until June 10, 2014, and the DOL will be conducting focus groups to assess the impact of the amendment, it's not likely that the guide will be required before 2016.... What is clear, however, is that the evaluation and monitoring of compensation paid to service providers and fees on investments is a fiduciary responsibility. Therefore, guide or no guide, plan fiduciaries must make sure they understand the fee s paid to and services provided by their service providers and seek out additional information if they feel the information received is incomplete or confusing."
(Buck Consultants)
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Nondiscrimination Changes Needed to Slow Move to 'Hard Freezes,' Commenters Tell IRS
"The chilly atmosphere for the nation's beleaguered defined benefit retirement system will get even colder if the federal government fails to find a way to help plan sponsors that have closed their plans to new hires out of a conundrum that will prompt many of them to completely freeze all employees out of the plans, business and employee benefit groups and employers said in comment letters to the Internal Revenue Service."
(Bloomberg BNA)
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Quinn Curtis Reveals True Intent of the Curtis/Ayres 401(k) Fee Paper
"[A]bout half of the fees investors are paying in excess of index funds are a result of investor choices that deviate from an optimally diversified portfolio. The law treats those investor choices differently from the construction of the plan menu, so it's helpful to make that distinction. Second, we show that there are a lot of individual funds in plan menus that are much more expensive than funds of identical style and active or passive management strategy and don't add much in terms of investors' ability to diversify. These are the dominated funds, and we find them in about half of the plans."
(Fiduciary News)
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Your 401(k) Is Not Free
"[T]he delivery of these various functions can be fully bundled, partially bundled, or totally unbundled. Generally (and hopefully) the outside investment advisor is independent of the other service providers.... it is incumbent upon the organization sponsoring the plan to monitor the costs and quality of the services as part of their Fiduciary duty to you the plan participant."
(The Chicago Financial Planner)
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Why Younger Workers Might Want to Borrow From a 401(k)
"Instead of cashing in your 401(k), one tremendous option to potentially fund a new business is to set up your new corporation and create a Solo 401(k) plan. Since after leaving your employer you will not be able to borrow against your 401(k), rolling over your old employer-sponsored plan over to your new company Solo 401(k) will reopen your window to borrow your own cash."
(The Wall Street Journal; subscription may be required)
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Retirement Confidence Rebounds -- for Those with Retirement Plans
"The percentage of workers confident about having enough money for a comfortable retirement, at record lows between 2009 and 2013, increased in 2014.... Nearly half of workers without a retirement plan were not at all confident about their financial security in retirement, compared with only about 1 in 10 with a plan.... 90 percent of workers participating in a retirement plan had saved for retirement, compared with just 1 in 5 of those without a retirement plan.... 68 percent with household income of less than $35,000 a year have savings of less than $1,000. Of those who have saved for retirement, only 38 percent report savings of less than $25,000."
(Employee Benefit Research Institute [EBRI])
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The Need for Consistent Plan Administration: Are You Doing What Your Plan Says You Are Doing?
"[O]ver the years, the way a plan is actually administered can begin to differ from how the plan documents say it will be administered.... Unfortunately, inconsistencies between actual plan administration and what the plan says will be done on a regular basis usually don't come to light until there is litigation against the plan and it turns out the terms were not being strictly followed."
(Fox Rothschild LLP)
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New York State Fines AXA Equitable $20 Million
"New York state's [Department of Financial Services (DFS)] fined the U.S. insurance unit of AXA SA $20 million, the state's largest penalty against an insurance company, for failing to adequately report changes in certain retirement-income contracts.... In its regulatory filings, according to the state, AXA Equitable 'failed to inform and adequately explain to DFS the significance of the changes caused by introduction and application' of a strategy designed to smooth funds' returns.... The company's omissions limited the state's ability to put in place consumer protections, according to DFS[.]"
(The Wall Street Journal; subscription may be required)
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[Opinion]
fi360 and CEFEX Urge SEC to Implement Third-Party Audits of Registered Investment Advisers (PDF)
"Given the challenges in crafting a five-year strategic plan that meets one of the SEC's most critical objectives, i.e. to promptly detect and deter securities law violations, fi360 and CEFEX believe, and would respectfully suggest, that leveraging private sector assistance through third-party compliance reviews -- the same concept considered by the Commission in 2003 and advanced by Chairman Schapiro in 2009 -- is an appropriate and more assured means of enhancing investment adviser examinations and increasing investor protection."
(fi360 and Centre for Fiduciary Excellence [CEFEX])
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Benefits in General; Executive Compensation
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District Court Allows McCutchen Defendants to Amend Fiduciary Breach Claim to Rely on Actual Plan Document Rather than SPD
"Under normal circumstances, this Court would be loath to allow amendment of the pleadings and a reopening of discovery nearly six (6) years after commencement of the case. Here, however, the Court is troubled by US Airways' untimely production of the Plan documents and its disingenuous contention that Defendants failed to request the Plan document.... The Court finds US Airways' reasons for its failure to produce the Plan to be woefully inadequate. Justice, therefore, requires that Defendants be granted leave to amend to allow a determination regarding whether the Plan documents allow for reimbursement, and whether US Airways, as the Plan Administrator, breached its fiduciary duty to Mr. McCutchen." [US Airways v. McCutchen et al., No. 2:08cv15t93 (W.D. Pa. Mar. 17, 2014)]
(U.S. District Court for the Western District of Pennsylvania)
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Illuminating Case on the Tax Effect of Forfeitures and Clawbacks
"One of the many unresolved issues in the area of compensation clawbacks ... is the tax effect to the executive who must return the compensation.... [This issue] generally is determined under Code Section 1341, the so-called 'Claim of Right Doctrine' ... However, Section 1341 and the case law and rulings relating to it have not been well-defined. Now comes a decision out of the U.S. Court of Claims ... granting a partial victory to Joseph Nacchio (and his wife), who was convicted of insider trading in a high-profile 2007 verdict, by allowing them to press their case to deduct the amounts forfeited upon the conviction as a loss under Code Sections 165 and 1341." [Nacchio et al. v. U.S., No. 12-20T (Cl. Ct. Mar. 12, 2014)]
(Winston & Strawn LLP)
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