Retirement Plans Newsletter

November 3, 2016 logo logo
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Employee Benefits Jobs

Associate Consultant / Retirement Plan Conversion
Spectrum Pension Consultants, Inc.
in CA, HI, WA, Telecommute

Defined Contribution Plan Administrator
EJReynolds, Inc
in FL

Retirement Plan Service Specialist 4
Wells Fargo
in NC

Strategic Account Manager
in PA

Manager - Administration Services
in CT

Retirement Analyst
in TX

401(k) Administrator
Pension Plan Services, Inc.
in MI

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[Guidance Overview]

DOL Issues FAQs Explaining Aspects of the 2016 Final Fiduciary Rule
"[So] long as the advisor is not making the actual rollover decision, the BIC exemption remains available.... While the Department has interpretive authority over how the ERISA prohibited transaction rules apply to IRAs, the IRS has enforcement authority.... The Department made clear that an adviser/financial institution may not rely on the level fee provisions in the BIC exemption if they receive third party payments (e.g., 12b-1 fees or revenue sharing payments) in connection with the assets recommended.... [I]ndependent marketing organizations (IMOs) can sell annuity contracts to retirement investors and receive compensation such as commissions and override payments."
Mintz Levin


Earn a Certificate in Retirement Plans This February in Orlando!

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

The Certificate in Retirement Plans provides a survey of defined benefit and defined contribution retirement plans, Social Security, investment principles and the legal regulatory environment surrounding retirement plans today. Learn more.

Data Security: Potential Risk and Liabilities for Employers and Retirement Plan Fiduciaries (PDF)
18 pages. "Retirement plan sponsors and plan fiduciaries should consider cyber security with respect to their own systems and at their retirement plan service providers because if the plan administrators do not require the plan's data be protected there is no overriding federal law dictating security or privacy standards, but there are consequences for the plan administrator and employer[.]"
Winstead PC

403(b) University Lawsuits May Impact 401(k) Self-Directed Brokerage Accounts
"There are so many moving pieces in these lawsuits related to the particular structure and operational differences between 401(k) plans and 403(b) plans, that it does remind [the author] of the expensive trap many service providers fell into after the 2007 IRS 403(b) reg changes. Those reg changes made 403(b) plans look ... a lot more like 401(k) plans. What those service providers (and the IRS as well) soon found out is that there are still fundamental structural and detailed differences between the two types of plans-and not recognizing those differences has been very costly. It appears that the plaintiff law firms may have made a similar miscalculation, underestimating the differences between the two types of plans."
Business of Benefits

Stock-Drop Complaint Based on Insider Information Fails to State a Claim
"The Fifth Circuit opined that it was unreasonable to say that a prudent fiduciary could not have concluded that disclosure of nonpublic information or freezing trades of company stock, both of which would likely lower the stock prices, would do more harm than good.... Notably, the Fifth Circuit declined to address the amicus briefs filed by both the [SEC] and [DOL], which were the first post-Dudenhoeffer amicus briefs filed by either agency (and, in the SEC's case, the first amicus brief filed in any stock-drop case)." [Whitley v. BP, No. 15-20282 (5th Cir. Sept. 26, 2016, revised Oct. 3, 2016)]
Morgan Lewis

Managed Accounts in Defined Contribution Plans
"Deterrents for selecting a managed account service as a QDIA include: perceived higher fee levels, a lack of a clear benchmark, lack of employee engagement, and the demographics of those using the QDIA (i.e., younger participants). As an opt-in service, managed accounts can be viewed as an enhanced offering for those participants with more complex financial situations. Plan sponsors should have a clear understanding of the managed account provider's construction methodology, level of experience, and most importantly, their asset allocation philosophy."
Manning & Napier


The Conference is 'Virtual', but the Insights are Real.

Sponsored by ASPPA

Catch up on the latest industry trends and topics while gaining up to 7.5 hours of CE? Hear from and interact with five of the industry's top thought leaders: Ilene H. Ferenczy, Brian Graff, Craig Hoffman, Bob Kaplan, and Adam Pozek.

Shape Sorters and Target-Date Funds
"Deciding which funds to include in target-date design is kind of like filling a shape sorter. You first design the target-date fund with a set of objectives and constraints. Once that's done, you choose underlying funds that fit into the right spots."

Bank of America Merrill Lynch Tells Advisers to Stop Selling Mutual Funds in Brokerage IRAs Now
"The brokerage firm is eliminating the potential for compensation conflicts that could arise between now and April 10, 2017, when the Labor Department fiduciary rule takes effect. The new regulation, which requires advisers to put their clients' interest first for retirement accounts, has created a rift in the industry on whether to keep selling IRAs on a commission basis or restrict them to fee-based accounts."

Survey Says: DOL Rule Will Shrink Advisor Force
"The [DOL] fiduciary rule is expected to reduce the financial advisor population, with 10 percent of advisors planning to leave or retire from the business ... Another 18 percent reconsidering their careers ... While many advisors appear headed for the exits, plenty of advisors are here to stay. Twenty-nine percent of advisors see the fiduciary rule as having a positive impact on their business, ... a sign that advisors may be moderating their positions with regard to the rule."

Spreading the Gospel of Better Retirement Plans
"Universities and hospitals have full-time human resources staff to select and monitor 403(b) plans. Public schoolteachers have 403(b)'s too, even if many of them are of questionable quality and unquestionable complexity. Employees and leaders of smaller nonprofits, however, are left to fend for themselves, and they muddle through in a variety of ways."
The New York Times; subscription may be required

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

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