DOL Fiduciary Rule is Here – Are You Prepared?

FiduciaryDutyIn an earlier blog, “DOL Fiduciary Rule Delayed: Future Still Remains Unclear,” we communicated that the Department of Labor’s (DOL) Conflict of Interest Rule (also known as the Fiduciary Rule) would become applicable June 9th, 2017. As a result, after today, investment advice providers to retirement savers will become fiduciaries, and the “impartial conduct standards” will become requirements of the related prohibited transaction exemptions. Continue reading

Are Employers Inadvertently Exposing Themselves To Fiduciary Liability?

When considering the duties of the various parties involved in a retirement plan, it is important to first distinguish between settlor and fiduciary functions.  Settlor decisions, such as the decision to start, amend, or terminate a plan, do not carry with them the same high standards of conduct as fiduciary decisions.

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Vendor Monitoring: Going Beyond the Determination of Reasonableness

As a responsible plan fiduciary (RPF),  the Employee Retirement Income Security Act (ERISA) requires you  under Section 408(b)(2) to ensure that arrangements with your service providers are “reasonable” and that only “reasonable” compensation is paid for their services.  To ensure RPFs were provided the information they needed to make better decisions when selecting and monitoring service providers for their plan, the Employee Benefits Security Administration (EBSA) estimated that the final rule would cost approximately $207 million1. Continue reading

Are your Vendor’s fees “reasonable”?

Plan fiduciaries are becoming more aware of the increased scrutiny being placed on the vendors who provide services to ERISA-covered retirement plans.  There is a renewed focus on what is considered a “reasonable arrangement” for fees and services with new disclosure requirements under ERISA 408(b)(2) that became effective in July of 2012.  The spotlight on service providers and their services and fees, however has actually overshadowed the ultimate responsibility of plan fiduciaries: to ensure their plans are being operated solely in the best interest of the plan’s participants and beneficiaries.

Recent Court case findings with regard to fiduciary status
A recent U.S. District Court case, Santomenno v. John Hancock,1  – emphasized the vital role that plan fiduciaries play in exercising authority and control in the management and operation of the plan, which entails having a thorough understanding of the services provided and the fees being charged. Continue reading

Why Vendor Monitoring of Retirement Plans is Always Essential

As a qualified retirement plan fiduciary, you are entrusted to oversee other peoples’ retirement assets. You make decisions on the services to be offered and the fees incurred. Today there are more media stories, lawsuits and plan audits related to retirement plans than ever before. The big reason? Plan fiduciaries make decisions on how to spend participants’ money.

In their publication, Meeting Your Fiduciary Responsibilities, the Department of Labor states, “An employer should establish and follow a formal review process at reasonable intervals to decide if it wants to continue using the current service providers or look for replacements.”

Can you imagine retirement plan fiduciaries not monitoring the plan’s investments? In the same vein, fiduciaries should monitor their Continue reading