Expert’s Corner

Sometimes it seems as though the list of entities with requirements of 403(b) plan sponsors is endless. In addition to keeping participants well served and satisfied, government regulatory agencies, such as the IRS, the DOL, and ERISA, have regulations and requirements that must be adhered to. For a long time, there were major differences between the requirements relating to 401(k) and 403(b) plans. In 2007, the IRS issued new regulations for 403(b) retirement plans; these were the first significant rule…

Sometimes the rules regarding providing investment services and advice can be counterintuitive.  For years, many institutions of higher education have offered a wide variety of options to their retirement investors.  The logic is, of course, that more choices is always better. It turns out this may not always be the case. In a previous article, we discussed the growing number of lawsuits involving 403(b) plan providers. That article focused on several components of those lawsuits, including inefficient and costly use…

The contentious history of the conflict of interest final rule on fiduciary investment advice, referred to as the Rule, began in 2009. It ended—at least for the time being—in April 2016, when the Department of Labor (DOL) filed the “final” version of the Rule with the Office of the Federal Register. Debate and resulting extensions brought the deadline for final implementation to January 2018. As of this writing, however, according to a DOL announcement in November 2017, key provisions—those covering…

While not legally required by the Department of Labor, an Investment Policy Statement is widely held to be an essential document for plan sponsors. The Investment Policy Statement (IPS) provides well-defined criteria and principles that facilitates prudent oversight of the retirement plan, and consistent, informed decision-making that keeps plan sponsors and the investment committee on track with the plan’s goals and processes.

Perhaps most importantly, the IPS evidences the plan sponsor’s fidelity to its fiduciary obligation, which, as built into ERISA…

Given the complexity of retirement plans, it’s not difficult for plan sponsors—whether new to the position, lacking formal training, or simply overwhelmed with all the responsibilities—to trip up. That said, whatever the cause, administrative missteps can be extremely costly—running from fines to plan disqualification (which creates a taxable event for all participants)—and government oversight is increasing. The results of a 2016 Willis Towers Watson survey of 300 U.S. retirement plan sponsors reveal that during the last two years, one in…

The list of universities sued under the Employee Retirement Income Security Act (ERISA) by allowing plan participants to pay excessive investment and administration fees reads like an institutional “Who’s Who.” Over the last year, 16 private universities were hit with lawsuits alleging breaches of financial duty with respect to 403(b) plan fees and investment options. These are Brown University, Columbia University, Cornell University, Duke University, Emory University, New York University, Johns Hopkins University, Massachusetts Institute of Technology, Northwestern University, Princeton…

By Trisha Brambley, Founder of Retirement Playbook, Inc.™ Today, 75% of Plan Sponsors use the services of an Investment Advisor for their retirement plan[1]. Many of these plans (up to 75%) do not have a specialized Retirement Advisor while others may have outgrown the Advisor they do have. The providers too are seeing an increase in companies looking for that “best fit” Advisory Firm. A high quality firm can offer outstanding investment and retirement plan expertise. Plan Sponsors are looking…

By Ary Rosenbaum, Esq. The value of a good ERISA attorney is rooted in the fact that an independent ERISA attorney can serve as a check and balance on the other retirement plan providers. An independent ERISA attorney would keep an eye on the administrative practices of the TPA and whether the financial advisor is complying with the processes that they agreed to with the plan sponsor and trustees. As part of the retirement plan provider puzzle, an independent ERISA…

by David R. Dacey, CPA Company A’s employee benefit plan is undergoing an independent  audit of its financial statements. As part of that audit, the auditor reviewed a series of deposit transactions of employee withholdings of retirement 401(k) monies. The auditor selected eight transactions for review of a total of 24 transactions during the year.  For those transactions selected, the auditor noticed that the number of days to deposit the retirement plan withholdings ranged from a low of two business…

Sometimes it seems as though the list of entities with requirements of 403(b) plan sponsors is endless. In addition to keeping participants well served and satisfied, government regulatory agencies, such as the IRS, the DOL, and ERISA, have regulations and requirements that must be adhered to. For a long time, there were major differences between the requirements relating to 401(k) and 403(b) plans. In 2007, the IRS issued new regulations for 403(b) retirement plans; these were the first significant rule…

Sometimes the rules regarding providing investment services and advice can be counterintuitive.  For years, many institutions of higher education have offered a wide variety of options to their retirement investors.  The logic is, of course, that more choices is always better. It turns out this may not always be the case. In a previous article, we discussed the growing number of lawsuits involving 403(b) plan providers. That article focused on several components of those lawsuits, including inefficient and costly use…

The contentious history of the conflict of interest final rule on fiduciary investment advice, referred to as the Rule, began in 2009. It ended—at least for the time being—in April 2016, when the Department of Labor (DOL) filed the “final” version of the Rule with the Office of the Federal Register. Debate and resulting extensions brought the deadline for final implementation to January 2018. As of this writing, however, according to a DOL announcement in November 2017, key provisions—those covering…

While not legally required by the Department of Labor, an Investment Policy Statement is widely held to be an essential document for plan sponsors. The Investment Policy Statement (IPS) provides well-defined criteria and principles that facilitates prudent oversight of the retirement plan, and consistent, informed decision-making that keeps plan sponsors and the investment committee on track with the plan’s goals and processes.

Perhaps most importantly, the IPS evidences the plan sponsor’s fidelity to its fiduciary obligation, which, as built into ERISA…

Given the complexity of retirement plans, it’s not difficult for plan sponsors—whether new to the position, lacking formal training, or simply overwhelmed with all the responsibilities—to trip up. That said, whatever the cause, administrative missteps can be extremely costly—running from fines to plan disqualification (which creates a taxable event for all participants)—and government oversight is increasing. The results of a 2016 Willis Towers Watson survey of 300 U.S. retirement plan sponsors reveal that during the last two years, one in…

The list of universities sued under the Employee Retirement Income Security Act (ERISA) by allowing plan participants to pay excessive investment and administration fees reads like an institutional “Who’s Who.” Over the last year, 16 private universities were hit with lawsuits alleging breaches of financial duty with respect to 403(b) plan fees and investment options. These are Brown University, Columbia University, Cornell University, Duke University, Emory University, New York University, Johns Hopkins University, Massachusetts Institute of Technology, Northwestern University, Princeton…

By Trisha Brambley, Founder of Retirement Playbook, Inc.™ Today, 75% of Plan Sponsors use the services of an Investment Advisor for their retirement plan[1]. Many of these plans (up to 75%) do not have a specialized Retirement Advisor while others may have outgrown the Advisor they do have. The providers too are seeing an increase in companies looking for that “best fit” Advisory Firm. A high quality firm can offer outstanding investment and retirement plan expertise. Plan Sponsors are looking…

By Ary Rosenbaum, Esq. The value of a good ERISA attorney is rooted in the fact that an independent ERISA attorney can serve as a check and balance on the other retirement plan providers. An independent ERISA attorney would keep an eye on the administrative practices of the TPA and whether the financial advisor is complying with the processes that they agreed to with the plan sponsor and trustees. As part of the retirement plan provider puzzle, an independent ERISA…

by David R. Dacey, CPA Company A’s employee benefit plan is undergoing an independent  audit of its financial statements. As part of that audit, the auditor reviewed a series of deposit transactions of employee withholdings of retirement 401(k) monies. The auditor selected eight transactions for review of a total of 24 transactions during the year.  For those transactions selected, the auditor noticed that the number of days to deposit the retirement plan withholdings ranged from a low of two business…

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