Technical Competence

Technical Competence

Technical Competence covers the nuts and bolts of the corporate retirement market, focusing on ERISA and the DOL regulations promulgated under its authority. All plan types are covered, including 401(k), 403(b), 457 and non-qualified plans, as well as IRA rollovers.

Caveat Emptor — Fiduciaries Beware New Fee Disclosure Rules

The U.S. Department of Labor is on a mission to provide better information to both plan sponsors and participants about plan expenses. At the heart of the DOL’s new rules is the need for plan sponsors and other fiduciaries to discover and clearly understand whether plan fees are reasonable in light of the services provided. The watchword? Caveat emptor — let the buyer beware; or in this case, as the buyer of plan services, fiduciaries and plan sponsors beware!   Read More

Proper Advisor Benchmarking Values Fact Over Opinions

It appears that benchmarking plan advisors will become as common as benchmarking funds and record keepers. The problem with benchmarking record keepers — and now advisors vs. funds — is that it’s really hard to assess value or outcomes compared with fees. David Witz of FRA Plan Tools outlines the case and the issues surrounding plan advisor benchmarking in a comprehensive article published in the Fall 2012 edition of ASPPA’s Plan Consultant magazine. While it’s getting easier to determine advisory fees and potential services, the question of value will remain until we can benchmark outcomes like we do with funds.   Read More

Plan Sponsor Asleep at the Wheel

Many employers get complacent about benchmarking fees, understanding the law and documenting their activities. The Tussey v. ABB case illustrates how one sponsor that was asleep at the wheel paid for those lapses. Advisors can use this to wake up clients and prospects who think it will never happen to them – why take that risk?   Read More

A Perfect Storm

Batten down the hatches — a perfect storm lies dead ahead. Election-year politics, a struggling economy, a gargantuan federal budget deficit and the push for tax reform will combine soon, and will create a challenge for the retirement planning industry that we haven’t seen since 1986. That’s the bad news. The good news: ASPPA, NAPA’s sister organization, is already engaged in the task of getting a simple message across to Congress: Don’t try to fix the economy at the expense of millions of Americans who are trying to save for their retirement.   Read More

Trends in Outsourcing Have Led to Open MEPs – What’s Next?

Mike Montgomery, an advisor and industry thought leader on MEPs (and NAPA Net’s MEP Conductor), reviews the trends in outsourcing that led to today’s open MEPs, and projects where the market might be headed in light of the 2012 DOL restrictions and the advent of 3(16) administrative fiduciaries. Plan sponsors have outsourced an increasing number of duties and liabilities as they try to back away from managing their 401(k) plans — but given the recent enactment of state-run MEPs, will this trend eventually lead to the nationalization of small-business retirement plans?   Read More

Is There a Silver Lining for State-Run MEPs?

Are state-run MEPs a potential boon for plan advisors? Though there is concern about the government trying to nationalize small-business retirement plans, would state-run plans actually be an opportunity for advisors? Jamie Kalamarides, SVP at Prudential, suggests in an interview that there could be a silver lining in these state initiatives. But small-business DC plans are sold — primarily by advisors and payroll companies — so it is doubtful that a “build it and they will come” mentality will be effective unless state-run retirement plans are made mandatory, which is harder to enact and raises a whole host of other issues.   Read More

408(b)(2.0) – The Next Steps for Plan Advisors

Finally, after months — perhaps years in some instances — of preparation, diligent providers of services to retirement plans have now completed their disclosures in satisfaction of ERISA Section 408(b)(2) and they lie in the hands (or at least the inboxes) of the responsible plan fiduciaries. The final deadline, July 1, has passed. While that milestone may merit a collective sigh of relief, the work is just beginning for the service providers that delivered the disclosures and the plan sponsors that received them. It is critical that both develop sound protocols to maintain compliance and to be prepared for what lies ahead.   Read More

Calif. Creates State-Run Private Retirement Plan

California Gov. Jerry Brown (D) signed legislation Sept. 28 that will create the nation’s first state-administered retirement savings program for private-sector workers, over the objection of critics who said it creates a new liability for taxpayers. The bill will establish the California Secure Choice Retirement Savings Program for more than 6 million lower-income, private-sector workers whose employers do not offer retirement plans.   Read More

Government Takes Another Run at Fixing the Retirement System — But is it Broken?

A proposal by Sen. Tom Harkin (D-IA) to address what he calls the “retirement crisis” would shore up Social Security and also create a new retirement fund run by the government but funded privately. What appears to be a government-sponsored IRA intended to provide pension like lifetime income benefits called “Universal, Secure and Adaptable (USA) Retirement Funds” seems to be another attempt to fix the DC system by creating another one.   Read More