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[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
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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
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Merrill Lynch to Pay $25M in Lawsuit Over Fees in Small 401(k)s
"Merrill Lynch, Pierce, Fenner & Smith Inc. will pay $25 million to settle a lawsuit that accused the broker-dealer firm of profiting from excessive fees charged to small 401(k) plans... The deal features a 'corrective remediation payment' totaling at least $8.8 million and a 'disgorgement payment' of $16.2 million, the motion said. Class counsel will request attorneys' fees equal to 35 percent of the settlement payment, or $8.75 million, the motion said."
Bloomberg BNA
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The Lawyer on a Quest to Lower Your 401(k) Fees
"When Jerome Schlichter started filing 401(k)-fee lawsuits against big companies a decade ago, the personal-injury lawyer from St. Louis wasn't taken seriously.... Companies now are so worried about suits alleging mismanagement of these retirement plans that 401(k) industry consultants have coined a term for the threat: 'getting Schlichterized.' ... Last year, law firms filed more than 25 fee cases against 401(k)-type plans ... That includes 14 from Mr. Schlichter's firm against employers including elite universities.... Consumer advocates say the litigation has saved 401(k) participants nationwide billions of dollars by helping to push down 401(k) fees, which declined 17% from 2009 to 2014[.]"
The Wall Street Journal; subscription may be required
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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
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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
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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
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OregonSaves Edging Closer to Being Live
"Eleven employers were selected for the first pilot program; they successfully completed the registration process for OregonSaves. Dozens of employers are scheduled to join the second pilot program, for which registration will begin in August."
National Tax-Deferred Savings Association [NTSA]
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[Opinion]
Legislation Enhances Consumer Protection for Retirement Savers
"H.R. 2823, the Affordable Retirement Advice for Savers Act, [and] S. 1321, the Affordable Retirement Advice Protection Act ... address the overly burdensome and complex [DOL] fiduciary rule, and replace it with a law that strengthens protections for retirement savers by requiring financial advisors to serve their clients' best interests. IRI strongly supports both bills[.]"
Insured Retirement Institute [IRI]
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[Opinion]
Pennsylvania Pension Reform, Part 1
"For a system that will likely run out of money by 2034 the thrust of this 'reform' is to reduce those onerous employer contributions while keeping employee contributions at similar, if not higher, levels in part by confusing those new participants impacted."
Burypensions
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Executive Compensation and Nonqualified Plans
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Discussions on the BenefitsLink Message Boards
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Need Aspirin for a Plan Loans Headache
"We have a plan with a few (3 or less) missed payments on loans that are otherwise in compliance with IRC 72(p). The Plan sponsor did not start up payroll deduction payments on time, or there was a short lay-off at the time that payments were to commence. We are well inside the cure period. We would like to reamortize the loans rather than doubling up payments to get them current or demanding a lump sum. Is this really a loan refinance (meaning the loan program must permit refinancing)? Or is it just a reamortization (keeping the terms otherwise the same)? And is something that is eligible for SCP, or does it require VCP?"
BenefitsLink Message Boards
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Spousal Attribution as Applied to SEP Sponsorship
"I am married and have a restaurant, with a few full-time employees. My husband is self-employed; his business has no employees. I have been told that he cannot sponsor a 401(k) because we are married and hence my employees would need to be covered under the 401(k). Is that true? If he uses a SEP instead, would the result be different?"
BenefitsLink Message Boards
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017 BenefitsLink.com, 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 BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.
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